When was the last time you used “subrogation” in a sentence? How about “telematics”? “Indemnity”? Odds are unless you’re studying your handy insurance jargon glossary on a daily basis, you’re probably not dropping these terms into casual conversation.
The world of insurance terms can be confusing, intimidating, and downright frustrating, especially to someone just learning the ropes. Whether you’re switching insurance companies, changing plans, or just trying to educate yourself on your options, you might quickly find yourself bemoaning the often-confusing, sometimes-convoluted, always-complicated terminology.
How to Choose the Right Comprehensive and Collision Coverage Levels for your Budget and Lifestyle
At Metromile, we’re here to make insurance lingo make sense — even to the most inexperienced newbie. Finding an auto insurance policy that fits your budget and lifestyle and keeps you at ease is so important — not just for your peace of mind, but also for your physical and financial security. Here’s what you need to know so you can choose the policy that’s perfect for you.
What Do “Comprehensive” and “Collision” Coverage Cover Anyways?
Throw the word “comprehensive” on anything and it sounds pretty impressive and all-encompassing, right? What else could you possibly need if you’ve got something “comprehensive” on your side? Well, for starters, collision coverage.
If you’re struggling to make sense of how something “comprehensive” could omit an issue as major as collisions (especially when cars are involved), you’re not alone. Before you judge a book by its cover and go with the first seemingly all-inclusive plan you see, get to know the ins and outs of what “comprehensive” and “collision” coverage are all about:
Comprehensive and Collision
Comprehensive and collision are two types of auto insurance coverage that are often grouped together because they both cover damage to your vehicle (as opposed to liability insurance, which covers the other person and their property in the case of a collision).
Let’s dig into each separate type:
Collision coverage helps you repair damages or replace your vehicle after a covered accident — whether you crashed into another car or object, rolled your car, or the other driver is at fault but doesn’t have enough insurance to pay for your repairs.
It doesn’t cover damage to your windows or windshield, weather-related damage (e.g. a branch denting your roof), damage to someone else’s vehicle or property, medical costs, or anything stolen from your vehicle.
Hit-and-run coverage is, well, hit or miss — your car could be covered with this type of insurance, but it’s not guaranteed in all states.
While you might think collision coverage should be required, it’s not — most states only require you to have coverage for injuries or damage you cause to someone else in an accident. There aren’t many states that require drivers to have insurance that covers their own damages. However, lenders will usually require you to have collision coverage for as long as you lease the vehicle — after all, they want to protect their investment.
Comprehensive coverage gets its name because it covers practically any damages to your vehicle that aren’t caused by an accident, whether the culprit is an animal, hailstorm, vandal, or something else. Plus, it protects you from the loss of your vehicle if it’s ever stolen (though in the unfortunate case that that happens, Metromile may be able to help you recover your vehicle).
However, it doesn’t cover damage caused by a collision with another vehicle, damage to someone else’s vehicle or property, stolen items, or medical expenses.
Like collision coverage, comprehensive isn’t required by state law — though your lender will likely require it if you lease your vehicle. However, it can be a good idea if you want peace of mind knowing you’re covered in the event of non-accident-related damages.
While both collision and comprehensive coverage cover a lot of ground, neither one truly protects you in all situations across the board. There are certain things neither one covers — take vehicle wear and tear, for example. If you need new brake pads or a headlight bulb replaced, you won’t be able to rely on collision or comprehensive coverage to foot the bill. And while comprehensive coverage will be a huge help if your car is stolen, it won’t help you replace any items that were in that stolen vehicle.
Do You Really Need Comprehensive and/or Collision Coverage?
In a literal sense, no — you’re not required by law to get comprehensive and/or collision coverage. Most states only require a certain amount of liability coverage, which covers other people and their property when you cause an accident.
However, just because you’re not required to have additional coverage doesn’t necessarily mean you shouldn’t consider it.
When you’re trying to figure out what kind of coverage you need and want, it’s best to look beyond the bare minimum legal requirements of your state and take stock of several factors in your life. For example:
- Would you be able to afford repair costs out of pocket? How’s your emergency fund looking? If you don’t opt for collision or comprehensive coverage, could you repair or replace your vehicle in the event of a crash or other incident?
- Do you lease your car? If you lease or finance your car, your lender may require you to have collision and comprehensive coverage. If the car is all yours, it’s up to you.
- How likely are you to file a claim? It’s impossible to predict the future, and as the saying goes, “accidents happen.” But if you live in areas where car thefts or natural disasters happen regularly or you’ve gotten into your fair share of fender benders over the years, then that fact is worth taking into consideration.
- What’s your monthly budget? The more money you pay for your policy, and the lower you set your deductible, the less money you’ll have to pay out of pocket in the event of an accident or other event. You don’t want to barely scrape by every month in order to afford your coverage, but you do want to settle on an amount that’s affordable and puts your mind at ease.
If you’ve mulled those questions over and come to the realization that collision and/or comprehensive coverage is right for you, then it’s time to figure out how much you need.
Here’s where your deductible comes into play — that’s the out-of-pocket expense that you agree to pay for losses up to a set amount, like $250 or $1,000.
The lower your deductible, the more you’ll pay for insurance (since your out-of-pocket expense will be lower, and your insurer will have to cover the rest). You can also choose to pay a higher deductible and pay less for insurance, but that means if you do want to take advantage of your collision and/or comprehensive coverage, you’ll have to shell out more out-of-pocket before your insurance kicks in to cover the rest.
So while there’s, unfortunately, no perfect mathematical formula (or magic spell) to reveal your ideal level of coverage, understanding all the factors involved and thoughtfully considering the options that fit your budget and lifestyle will help you land on a plan that leaves you feeling content and comfortable.
Still Have Questions?
Totally understandable — this stuff is tricky. One great way to get more answers to common questions is to visit the Metromile Help Center. There, you’ll be able to comb through content on a variety of topics like billing, pricing, coverage, and more. If you’ve got a question, chances are someone else has it, has had it, or will have it in the future.
If you’d rather talk one-on-one with a qualified specialist, Metromile has plenty of those, too. Call 1.888.242.5204 any time from 6 a.m. to 6 p.m .PT, Monday through Friday, and a licensed agent will be able to address any of your concerns, give you a personalized quote, or start your new policy.
Already a customer? Awesome. Call 1.888.311.2909 between the hours of 6 a.m. and 6 p.m. PT, Monday through Friday, and a qualified specialist will help you out.
Pay-Per-Mile Comprehensive and Collision Coverage with Metromile
If money is the only thing holding you back from purchasing collision coverage and comprehensive coverage, it might be time to consider other options, like pay-per-mile car insurance with Metromile.
With Metromile, your rate is based on your actual driving habits, which means the less you drive, the less you pay. As a result, our customers save an average of 47%* compared to what they were paying their previous auto insurer.
Your driving situation is unique — be sure to choose a company that gets that and will work with you to find a customized plan that makes sense and meets your needs. Get a free quote from Metromile today.
* Average annual car insurance savings by new customers surveyed who saved with Metromile in 2018.