What’s the difference between collision and comprehensive coverage?
man and woman difference between collision and comprehensive

First, we just want to say that you’re not the only person who’s unsure of the difference between collision and comprehensive coverages! We often get asked what the differences between them are, and whether you need both coverages on your car insurance. While these coverages are optional, they’re both important. Our coverage expert and Insurance Advisor, Natasha, has all the info you need to understand how they both work. Hit play to dive right in – and then read on for even more important info!

What is the difference between collision and comprehensive coverage?
Play: What is the difference between 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 (DCPD). This took effect on January 1, 2022.

The basics of collision vs. comprehensive coverage

Consider all the things that could happen to your car. Now think about whether or not you’d be able to pay out of pocket for repairs to get it back on the road. From hail to theft to a busted fender after an accident, getting your car fixed – or even replaced – could drain your bank account, and fast. The good news is, collision and comprehensive coverages are available to you to help you pay for certain types of damage.

These two coverages are alike in that they both have limits, deductibles, and are optional when you own your car outright. And if you lease or finance your car, they’ll probably be required by the lessor or financing company.

But, each of these coverages provides unique protection.

Collision coverage

Collision coverage covers you for the cost to repair or replace your vehicle when you’re at fault in an accident. It’s also known as Collision or upset insurance.

Collision covers damage caused if:

  • You hit another car
  • You hit a stationary object (like a road sign, guardrail, streetlight, or a dead animal)
  • Your car rolls over 

What if you get into an accident with another vehicle but it isn’t your fault? If you live in Alberta, Ontario, Quebec, Newfoundland and Labrador, Nova Scotia, Prince Edward Island, or New Brunswick, damage caused by a third party (that is, another driver) is covered through Direct Compensation Property Damage. In Quebec, it's called the Direct Compensation Agreement.

Learn more about the no-fault insurance system and how you’re covered. If you live in one of the other provinces not listed here, visit your province’s website to learn how their system works. 

Remember, DCPD only applies for not-at-fault accidents. And, you’re only covered up to the percentage that you’re not at fault. If you’re any percentage at fault, you’ll need collision to cover that part of the damage. For example, what if you have collision coverage and you’re 60% at fault in a fender bender? In a case like this, DCPD pays for 40% and your collision pays for 60%.

Did you know? A hit and run must be reported to the police within 24 hours. From an insurance standpoint, the accident needs to be reported in order for it to qualify as not-at-fault.

Comprehensive coverage

Comprehensive coverage protects your car from damage that’s caused by certain things other than a collision with another vehicle or object. Think of things that are usually out of your control.

Here’s what’s typically covered:

  • Theft or attempted theft
  • Vandalism or civil disobedience, such as a riot
  • Weather and natural disasters (floods or lightning from thunderstorms, hurricanes, tornadoes)
  • Hail
  • Falling objects (like tree branches)
  • Flying objects (like rocks or gravel)
  • Fire or explosions
  • Earthquakes

Do I need both collision and comprehensive coverage?

Most people choose to have both so they don’t end up paying an arm and a leg out of pocket for repairs. After all, you never know when something could happen. It’s always better to err on the side of caution!

But, there are other 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 skip physical damage coverage. But – you need to make sure you can afford any replacement or repair costs out-of-pocket if something happens.

Another example could be if you’re storing your vehicle for the season. It’s highly recommended to keep comprehensive insurance if you’re storing your car. This protects it even though it’s not on the road from things like theft, or if it’s damaged from something like a fire. But, you might consider temporarily removing collision (although if you live in Quebec, having comprehensive only isn’t allowed.) Since each situation is unique, it’s best to get in touch with your insurer to make the best decision based on your needs.

Tip: Curious how each Canadian province handles car insurance? Find out how auto insurance differs between them. From coverages to cost to how it’s managed, no two are alike!

No matter the situation, if you’re thinking about changing or removing coverages it’s a good idea to talk to your insurer first to be sure you’re making the right move for your needs. The most important thing is having the right type of auto insurance for you and your vehicle.  Have insurance with us? You can reach out via chat, email or over the phone. We’re happy to help answer any questions you have. Our fully-licensed Insurance Advisors can help break down your policy. We’re always here for you.

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