Ask Your Absolute Insurance Agent: What is the difference between comprehensive and collision coverage on my auto insurance?

"What is the difference between comprehensive and collision coverage on my auto insurance?"

When you look over your auto insurance declaration page, you will notice that there are a lot of different coverages and amounts listed. If your vehicle is covered with full coverage, you will have coverage for Comprehensive Coverage and Collision Coverage, each with a deductible listed.  What is the difference between the two, and what does the deductible mean?

Collision Coverage
Collision Coverage comes into play if you are involved in an accident with another vehicle or if you hit an object such as a mailbox. Collision coverage also covers damage caused by potholes. Collision coverage will pay to repair the damages to your vehicle, minus your deductible.

• Example:  Maria has collision coverage on her insurance policy with a $500 deductible for her Ford Explorer. An unknown driver hit her Explorer while it was parked and drove off. Maria is told that it will cost $4200 to repair her car. Her insurance company will pay $3700 to have her vehicle repaired ($4200 in damages minus her $500 deductible)
• Example: Joe has collision coverage on his insurance policy with a $500 deductible. He is driving his minivan and backs into a cement wall behind him. The wall has no damage, but the collision with the wall has caused $2000 damage to his vehicle. His insurance company will pay $1500 to have his vehicle repaired ($2000 minus his $500 deductible)

Comprehensive Coverage
Comprehensive Coverage is sometimes referred to as “other than collision” coverage. This coverage can help pay for damages to your vehicle not caused by a collision, such as: accidents involving an animal, hail, fire, certain falling objects such as a tree branch, theft, and vandalism.  Comprehensive coverage will pay to repair the damages to your vehicle minus your deductible.

• Example:  Shirley has comprehensive coverage on her insurance policy with a $250 deductible on her Toyota Camry. Shirley is driving home and hits a deer. She gets an estimate of $3000 to fix her vehicle.  Her insurance company will pay $2750 to have her vehicle repaired ($3000 minus her $250 deductible)
• Example: James has comprehensive coverage on his insurance policy with a $500 deductible on his truck. A hail storm sweeps through James’ town and his truck suffers $2000 in hail damage. His insurance company will pay $1500 to have his truck repaired ($2000 minus $500 deductible)

Your insurance company might decide that your vehicle is “totaled” when the cost to repair the car is greater than the value of the vehicle or in some cases when it reaches a certain percentage of its value.  In that instance, your insurance company will issue payment for the Actual Cash Value of the totaled vehicle minus your comprehensive or collision deductible.

You've Got Some Q's: We've Got the A's

Q:  Why does it matter whose name is on the title?

A:  This is an important questions and the answer is because the owner (titled individual) is ultimately liable for the vehicle.  For instance, if you are driving your friend's vehicle, and you get into a horrible accident that is your fault, the owner could still be sued after all insurance has been exhausted.  As the liability of the insurance follows the vehicle, so to does the liability of the titled owner of that vehicle.  Most insurance companies will want the insurance named in the same way the cars are titled.


Q:  Flood insurance will cover my belongings in my basement, right?

A:  No.  Flood insurance has limited coverage in basements period.  In fact, Flood Coverage will only recognize food freezers, heat pumps, sump pumps, water pumps, washers, and dryers as covered property in the basement.  These are NOT covered to replacement cost either.


Q:  I was waved through while trying to get out of a parking lot and was hit by another driver.  Is this my fault since I was waved through?

A:  Yes.  This actually happens quite a bit.  To begin, never rely on another driver to be your eyes and ears on the road.  Often times, the other driver is not looking at all parts of the road to make sure you are safe to pass through.  As the first article in this newsletter explained, be wary that you might be waved through and then hit by the driver that did the waving!  Fact is, only you know when it is best to go through and you can never rely on the judgment of another driver.  Be cautious of these situations, and better to be slow or late than in an accident.

Steering Clear of Staged Accidents

It happens more than you think - a driver causes an accident to collect the insurance money - and you could become the victim.

The Sudden Stop:

• "It happens like this," says Hartford Special Investigations Manager Odie Waters, "I'm driving along, minding my own business, in rush hour traffic, and the car in front of me inexplicably slams on (the) brakes.  I read-end that car and I get blamed for the accident."  The driver of the first car will claim that a "phantom" dog or child ran into the road, or that the car in front of them had stopped suddenly, although that car will not be involved in the accident.  Any witnesses will have driven off long before the policy arrive, and it's nearly impossible to prove a dog didn't dart out.

Inattentive Targets in Traffic:

• The drivers in such a scam cruise clogged highways and city streets, watching in the rear view mirror, looking for someone not paying attention.  In the past, two cars might employ a tactic called the "swoop and squat," where one car would crowd the victim from behind and another would stop suddenly in front.

The Phantom Wave:

• Another type of staged accident can occur when a driver is trying to merge.  The scam artist will wave you into the lane and then crash into the side of your vehicle.  This can also happen when someone is backing out of a parking space.  A second car will stop and wave the first car out, as if waiting for the space, but then drive into the first vehicle.  In both cases, the scam artist denies stopping or waving, and police find the victim at fault for failing to yield the right of way.

Tips to Avoid Staged Accidents

How you can avoid a staged accident:

• Pay attention to the road - no applying make-up, shaving, texting, or talking on cell phone.
• Be wary of "beater" cars - especially if they are changing lanes suspiciously.  Even if the driver has no ill-intent, the condition of the car might mean a poor driver
• Maintain a safe following distance
• Call policy and the insurance company promptly after an accident.  If the other driver discourages you from doing so, it is all the more important to call promptly
• Tell your claims handler if the accident seems suspicious

Claims: Q and A

Q:  I own a home and my girlfriend just moved in, is her stuff covered under my home insurance?

A:  No.  Since she is not a relative, there is no automatic coverage for her belongings or liability.  In most cases, there is an endorsement that can be added to the policy to cover her.  In other cases the best thing would be to establish a renters insurance policy.  Either way you go, these are relatively cheap fixes to a little known coverage gap for both property and liability.


Q:  My basement wall is bowing and I'm afraid that it will eventually fall in.  Will my home insurance cover this?

A:  No.  This is a matter of neglected upkeep on the home.  Just as your home insurance will not pay to replace a roof that is deteriorated from normal wear and tear, it will not pay for the repair to the normal pressure of the earth against the foundation walls.  Insurance is protection against sudden and accidental risks, not risks that persist over time and have been neglected.


Q:  If I have an accident that is my fault, will my full coverage pay for a rental car?

A:  No.  Comprehensive and Collision coverage do not pay for rental car reimbursement.  That coverage needs to be endorsed to the policy in order for the coverage to be in effect.  The same applied to Roadside assistance or towing & labor.  Full coverage merely covers physical damage.