What is collision coverage?

September 27, 2019 | Chris Costello, Esq.

Insurance is a confusing world and can be quite intimidating if you do not understand the coverages and their purposes. There are so many different types of coverages and each have specific purposes, benefits and exclusions. Most states, including New Jersey, require all drivers have auto insurance and it has a mandatory minimum liability limit. Currently, New Jersey requires minimum liability coverage of $5,000 for property damages and $15,000 for personal injury protection (PIP).

While I could spend pages and pages talking about all the different coverages and their benefits, I will likely cover more types in the future, for this post I am going to discuss specifically collision versus comprehensive coverages.

Collision and comprehensive coverages fall under a policy that people often refer to as “full coverage.” I have heard people are several occasions tell me they have “full coverage” but they have no idea what that means and I have found more often than not, they do not in fact have “full coverage” rather they have a minimum limits policy as required by the state. Perhaps they understood “full coverage” to be the same as being fully covered legally. As you can imagine this created quite the issues when trying to help them recover insurance funds. Knowing what is actually listed on your policy is very important. If you do not know, I recommend you contact your insurance agent (today) and ask for a copy of your declarations page, just so you can know and be prepared for any future issues.

Difference between Collision and Comprehensive Coverage

Alright, so let’s take a look at part of “full coverage” insurance, collision and comprehensive coverage.

First, what is collision and comprehensive coverage?

For the short answer, collision coverage is insurance coverages that pays for damages to your vehicle caused by colliding with another car. Collision insurance pays when a 3rd party is not responsible for the damages or a liability coverage option is not available. Comprehensive coverage is insurance coverage for damaging events which are not collision related such as theft, vandalism or storm damage.

What does collision and comprehensive insurance cover?

Second, what does collision and comprehensive insurance cover?

Above I mentioned collision insurance is for collision related damages and comprehensive insurance is for other damages not involving a collision.

Let’s look at the damage possibilities a little closer and talk examples:

Say you distracted by the epic workout session you just had and not looking you back into someone’s car as you are leaving the gym. The damages to their car would be coverage by liability coverage but without collision coverage your car would be left damaged unless you came out of pocket to fix it.

Next example, you are visiting your long-lost cousin, Dorothy, in Kanas and of course a tornado comes through since that is tornado land. Well the tornado picks up your car and not so gently drops it (not on a witch) causing it to be damaged. This is where, provided your policy doesn’t have a tornado exclusion, comprehensive coverage would step in and pay to have your car repaired or replaced.

Okay one more because these are fun… You are having coffee at this new super trendy hip spot in a slightly sketch part of town you found on Instagram. After getting the perfect latte picture and posting it for your followers to rave over you go out to your car and see that someone in this hip area decided your car needed some “piazza” and your car has been vandalized. Whelp, hopefully you have comprehensive coverage because provided there isn’t an exclusion in your policy comprehensive insurance should step in to have your car made a little less hip.

Here is simpler way to see the differences:

Collision Insurance Pays: Comprehensive Insurance Pays:
Car hits tree Tree falls on car
Car crash with another car, for what to do after a car crash read our 10 best steps to take after a crash article Deer or animal runs into your car
Car rolls over Fire consumes car
Car damaged due to pot holes Car is stolen
Windshield is cracked or broken

One of the most common uses for comprehensive coverages is fixing or replacing windshields. Nothing is more frustrating than having a giant crack across your sightline when driving and then having the sun reflect off of it blinding you. If you have comprehensive insurance there is no reason endangering yourself and others by driving with obstructed views, contact your agent to get it fixed.

Okay, I could think of examples all day but let’s keep going.

Do I need Collision and Comprehensive Insurance Coverage?

Third, why do I need collision and comprehensive insurance coverage?

While collision and comprehensive insurance is optional it is a great protection to have. Now, if you have the extra money laying around to pay for any damages, not caused by another person, to your car then you can close this and move on as you don’t really have a need for the coverage. But if you are like most Americans and do not have a couple grand laying around to be used to repair collision, theft, vandalism or storm damages then you should call your local agent and add the coverage.

Things to consider when deciding if you should pay for the added coverage:

  1. How likely are you to get in an accident? To determine your accident risk consider these questions:
    1. Do you drive a long distance to work?
    2. How often are you driving into work or other places?
    3. How is your driving? Take a look at the person in the mirror and really question if a lapse in judgement is worth your savings.
  2. What is the value of your car?
    1. If you are still making payments on your vehicle you should seriously consider the added coverage. You do not want to be stuck paying for a damaged car or worse, paying on a wrecked car you can’t afford to fix.
  3. What kind of liquid cash to you have?
    1. If the unthinkable happened do you have the funds to pull from your savings or emergency stash to fix the vehicle?

As discussed, while collision and comprehensive insurance coverage is optional it is a great option to have. You should always be very careful on the road but sometimes accidents happen, or mother nature has its own plan. Adding these coverages help to bring you some peace of mind and protect your assets.

If you have additional questions about insurance specific coverages or you need additional information on a coverage issues, contact us at Costello Law Firm. We are happy to help answer questions you have about a coverages or coverage issues.

This article is intended for informational purposes only and should not be considered as legal advice.  

Chris Costello, ESQ.

Chris Costello, ESQ.

Chris handles matters in both New Jersey and Pennsylvania and is an active member of the New Jersey Association for Justice as well as the Burlington County Bar Association. As a Burlington County personal injury lawyer, Mr. Costello has served as chairman of the Burlington County Bar Association Personal Injury Committee and lectured on topics related to auto accidents and insurance law.
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