Collision coverage helps pay for the repair or replacement of your vehicle if it is damaged or destroyed in an accident with another car, regardless of who is at fault. That's different from liability coverage, which helps pay for damage to someone else's car because of an accident you cause. Both comprehensive and collision coverage are equally important to protect your vehicle from physical damage. Ultimately, you need to choose the right coverage for your budget and needs.
Keep in mind that some insurers may require you to purchase comprehensive and collision coverage together, rather than buying collision coverage separately. In any case, it's always a good idea to insure your car against collision-related damage, especially if you drive frequently or in high-traffic areas. While insurers generally sell them together and drivers of older cars tend to leave them at the same time, Poe and Worters say comprehensive insurance is better value for money than collision coverage. Collision insurance isn't required in any state, but lenders often require it if you finance or rent a car.
Car owners should also weigh, in advance, the possible insurance payment in the event of a collision or comprehensive claim. Lenders often require collision insurance because repairing or replacing a new car can be quite expensive. However, like any other car, older cars may still need collision insurance if they aren't fully paid and required by the lender or landlord. Dealers who rent cars and trucks typically require full-coverage auto insurance, including collision coverage and comprehensive coverage.
While there is no real type of policy known as “full-coverage auto insurance,” the term generally refers to an auto insurance policy that includes liability, collision, and comprehensive insurance. If you're the type of car owner who plans to keep your car on the road for more than a decade, you'll want to think about the cost of the collision, since comprehensive insurance for several years compared to collision insurance tends to cost much more than comprehensive insurance, since collision claims are more common. While collision insurance covers incidents related to a collision, comprehensive insurance covers damage not caused by a crash to the vehicle, such as fire, hail, or theft. If the at-fault driver doesn't have enough insurance to pay for the damages and you don't have property damage coverage for underinsured or uninsured motorists, collision insurance will cover the damage.
Keep in mind that collision insurance only reimburses you for damage to your car, not for damage to other vehicles or objects or for bodily injuries sustained in the accident. And if you're a new or new car owner and have the financial resources to buy a new car if needed, you might not want to worry about collision and all-risk coverage.