Personal Finance

Understanding Comprehensive and Collision Insurance

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Collision and comprehensive insurance are two of the most important types of car insurance to understand. They’re not legally required by any state, but they can come to the rescue in a variety of situations.

What collision and comprehensive insurance cover

Collision and comprehensive insurance are similar and are often sold as a package, but they don’t cover the same problems. Both pay to fix damage to your own car or replace it entirely — not for injuries or for damage to anyone else’s property.

» MORE: What is comprehensive insurance?

How much collision and comprehensive cost

To get realistic comparisons, we analyzed rates for minimum-coverage policies and compared them to policies with comprehensive, collision, and higher liability limits that are commonly considered “full coverage” car insurance together. Here are the rates for the seven largest insurance companies in the U.S.

Car insurance rates vary widely by state for similar policies, even when it comes to comprehensive and collision coverage alone. Here are the average costs differences between minimum and full coverage in every state.

The cost to add collision and comprehensive insurance varied widely among the companies we sampled. Your own cost will depend on the value of your car, your location, your driving history and the deductible amount that you choose.

Save money by raising your deductible — if you can pay out-of-pocket to fix or replace your car.

You can save money by raising your deductible. Many policies offer ones as high as $2,000. But do this only if you’re prepared to spend more of your own money to fix or replace your car. Shop around for prices to see if you’re getting a good deal.

» COMPARE: Car insurance quotes from multiple companies

Should you buy collision and comprehensive coverage?

Yes: If you took out a car loan to buy your car, your lender will probably require that you carry collision and comprehensive coverage.

Yes: If you lease your car, your leasing company likely requires you to buy collision and comprehensive coverage.

Yes: If you couldn’t afford to replace or significantly repair your car if you crashed it or if someone stole it.

Yes: If your area has a high incidence of car theft, vandalism, severe weather (like hail) or animal collisions and you don’t want to pay for repairs yourself, or a new car.

No: If your car is older and not worth a lot. Remember the maximum payout will be the value of your car if it’s totaled or stolen. If your car’s value is low, consider whether the potential payout would be worth the premiums you’ll pay. Remember, too, that the deductible amount will reduce any claims check. Check out NADAguides for your car’s current value.

About 77% of all U.S. drivers buy comprehensive coverage, and 72% buy collision, according to an Insurance Information Institute analysis.

NerdWallet averaged rates for 40-year-old men and women with no incidents on record for 20 ZIP codes in each state and Washington, D.C., from the largest insurers, up to 12 in each state. Rates for minimum insurance coverage represent the limits required by law in each state.
For the full coverage category, we averaged rates from the largest insurers for 40-year-old men and women in 10 ZIP codes and with the following coverage limits:

  • $100,000 bodily injury liability coverage per person.
  • $300,000 bodily injury liability coverage per crash.
  • $50,000 property damage liability coverage per crash.
  • $100,000 uninsured motorist bodily injury coverage per person.
  • $300,000 uninsured motorist bodily injury coverage per crash.
  • Collision coverage with $1,000 deductible.
  • Comprehensive coverage with $1,000 deductible.

In states where required, minimum additional coverages were added. We used a 2015 Toyota Camry in all cases. These are sample rates generated through Quadrant Information Services. Your own rates will be different.

This article originally appeared on NerdWallet