What’s the difference between collision and comprehensive coverage?
Coverage expert and Customer Service Hero, Natasha

We often get asked what the differences between collision and comprehensive coverages are, and whether you need both coverages in your car insurance. While these coverages are optional, they’re both important coverages that are worth having. Our coverage expert and Insurance Advisor, Natasha, has all the info you need to understand collision and comprehensive coverage.

Ask Sonnet: Collision vs. Comprehensive Coverage - Transcription

Hi, I’m Natasha, I’m a customer service hero at Sonnet.
I think when people are first purchasing a policy they’re looking at a few things. They want to make sure they can afford it but they also want to make sure that they have the coverage that they need.
Collision and comprehensive really just covers your car.
When you’re involved in a collision there’s two ways that it could pay out of your policy.
If it’s your fault, that will pay out of the collision section.
If it’s not your fault, that will pay out of a different section called direct compensation property damage.
Except in Alberta or Quebec, you’d be contacting the other parties insurer directly but everywhere else that would pay out of a different section of your policy.
For comprehensive it’s a little different because it’s anytime it’s sort of out of your control.
So it will be for things like if your vehicle is stolen, set on fire, struck by lightening, damaged in a hail storm, wind storm or an earthquake or something falls on your car.
It’s not something that you need to have but it’s definitely something that you want to have.
If you’re kind of, not really too fussed about whether or not you want to replace that vehicle,  maybe it’s only worth a thousand dollars you know, and your minimum deductible will be five hundred, doesn’t really seem worth it.
If you’ve got a vehicle that you really love, you want to make sure that you have collision and comprehensive both of them included 
because having both of those coverages means that no matter what happens you can replace your vehicle or repair it, whatever the case may be.
Your car ís important to you, you want to make sure that you have coverage for your vehicle.

Heads up! This video was recorded before Alberta started using Direct Compensation Property Damage (Collision - Not Your Fault) to cover not at-fault collisions.

Collision vs. comprehensive, at a glance:

Collision and comprehensive coverage work together to protect your car from many kinds of damage – so you won’t need to pay out-of-pocket to repair or replace your car.

Collision coverage

Collision coverage protects your car when you’re at-fault for an accident, such as:

  • Your car hits another car
  • Your car hits an object (like a road sign or a street light)
  • Your car rolls over

Tip: Some not-at-fault accidents, like if you’re involved in a hit and run collision, are still covered under your collision coverage.

If the accident is not your fault, however, the cost of the damage is covered through a different part of your policy, called Direct Compensation Property Damage (which is called the Direct Compensation Agreement in Quebec). In Alberta, Direct Compensation Property Damage (or Collision - Not Your Fault in Sonnet terms) is now also used to cover not at-fault collisions. Learn more about the no-fault insurance system and how you’re covered.

Heads up! The change to no fault collision in Alberta takes effect on January 1, 2022.

Comprehensive coverage

Comprehensive coverage is a little different, because it protects your car from damage that’s caused from things other than an accident. This could be a rock hitting your windshield or a tree falling on your car during a storm. While comprehensive coverage can differ between insurers, here’s what it commonly covers you for:

  • Your car is damaged by fire
  • Your car is vandalized
  • Your car is stolen
  • Your car is damaged by a falling object
  • Your car is damaged from a wind or hailstorm

Tip: Although not mandatory coverage, if you lease your vehicle, both collision and comprehensive coverage are usually required by your leasing or financing company. Learn more about insuring your leased or financed vehicle .

How much are you covered for?

If you have an accident, your vehicle will be covered up to its actual cash value . The value of your car is determined by things like mileage, age, maintenance history and the purchase price the vehicle. As you’ll have got some use out of your car, you won’t be entitled to the amount you paid for it (similar to if you were to sell your car to someone else). If you have a new (or nearly new car), you may be able to get an extra coverage called a depreciation waiver . Therefore, you’re paid the replacement cost – meaning your car would be replaced up to its full value, with no deductions for wear and tear. Remember though, you’ll still need to cover the cost of your deductible.

Most people choose a collision and comprehensive coverage bundle to make sure they have coverage for most risks. However, they’re not your only options when it comes to physical damage coverage. Do you have an older vehicle? It’s common for people with older cars, or a car that’s fully paid off, to forgo physical damage coverage. In this case, you’d need to be able to afford any replacement or repair costs to your vehicle if something happens. Another example would be if you’re putting your vehicle in storage for the season, maybe you feel that you can remove collision and comprehensive coverage. Whatever your situation, consider all of your physical damage options to make the best choice for your needs.

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