May 25, 2023
Auto insurance is the item I get asked about the most in my day to day operation. You hear about auto insurance ALL the time and it seems like it’s the majority of commercials you see on a regular basis. It’s either auto insurance or food right? You get car manufacturers too so throw that in there. My point being that auto insurance is a hot topic and you get a lot of information from carriers and commercials. There also seems to be a ton of new companies coming out almost daily. Did you know Tesla just came out with their own auto insurance company?? It’s crazy right?!
Let’s dive into an aspect of auto insurance a little bit because this is a question I get to a lot. What are my deductibles and when do I have to pay them? There are a lot of layers to auto insurance and I break it down to three sections when I talk to clients and prospects. There is coverage for other people, you and your family, and your car. You pay a deductible for part 3 only, coverage for your car. When you hear “liability only” that simply means you aren’t getting coverage for part 3, your car. That’s typical if your car is older and isn’t worth a whole lot. I wrote another blog post about auto insurance in general and it explains all three parts, so check that out for more information. The purpose of this post is to simply break down the differences that you see in part 3, coverage for your car itself. There are two main components of part 3 and that’s comprehensive and collision coverage. Let’s dive in!
Let’s start with a hypothetical claim. Note, this actually did happen and it blew my mind when I got the answer and I’m an insurance professional.
You’re sitting in your garage and just get home from a long day at work. You aren’t quite paying attention and shut your garage door. You hear a loud crash and think to yourself “oh no!” You shut your garage door on your car and didn’t pull in all the way. Ah, I better call my insurance company. Would this claim be a comprehensive, collision, or covered under your homeowners policy? Ding ding, if you guessed collision then you’re right! Why though?
COLLISION
Collision coverage is defined as your vehicle colliding with another person or object. You typically think of you getting into a car accident and having damage after hitting another car, a fence, object etc. The important thing to note here is that your vehicle doesn’t necessarily have to be in motion. It can be parked and collided with. Another great example of this is a shopping cart getting out of control and hitting your car in a parking lot. That’s a collision technically. Also a child riding his bike and hitting your car or even a football getting out of control and hitting your car. All collision according to auto insurance. Your rate also typically will have a surcharge if it’s considered at fault. So if you rear end someone for example or hit someone’s fence, a light pole etc. You can have a not at fault or fault free collision and your rate is typically not affected. Talk to your carrier about that of course but that’s from my experience. So this garage door shutting on your car, that’s a collision. It has a mechanism and technically collided with your vehicle.
COMPREHENSIVE
Comprehensive coverage is damage to your car other than from a collision. Some auto policies even show it as “other than collision” coverage. Vandalism and getting your car stolen are the two big examples of this. If someone keys your car or maliciously hits it with an object. That would be considered comprehensive coverage. Your car being damaged from a falling object is another big example of comprehensive. A paint can falling down or a ladder falling on your car would be examples of that. So let’s say your garage door breaks and just falls down on top of your car in the middle of the night. That’s considered comprehensive in that case. You don’t get any sort of surcharge or rate increase from comprehensive claims.
What if your house catches on fire and your car is in the garage and burns? What if you have a flood or hurricane and your car is damaged? That is considered comprehensive. Remember, anything auto related is not covered under a home insurance. It’s covered under your auto insurance so that’s an important distinction too.
You can go nuts with all the different scenarios and distinctions and hypotheticals with things happening to your car. Is it comp or collision?! Ah it can drive you crazy and getting into the weeds and fine print of your auto policy is not fun. The bottom line is you should talk to your carrier, agent, broker etc and ask. Most of this stuff will be taken on a claims by claims basis depending on the specific thing that happened. These are the general differences but talk to your professional or give us a call and we can discuss and see. Cheers and thank you for the love and support!
Remember we’re always here to help!