Difference Between Collision and Comprehensive Insurance

Strong Tie Insurance November 12, 2019 Commercial Truck Insurance

Commercial truck insurance comes in a variety of shapes and sizes. While your needs may vary from the company down the street’s needs, there are two significant forms of coverage that every trucking company considers: collision insurance and comprehensive insurance. Both of these types of coverage protect you and your company when your trucks are involved in an incident, but the specifics that these types of insurance cover are very different.

Some insurance plans might offer both collision and comprehensive coverage. Many plans, however, might only come with one and require you to add the other as needed. Understanding the difference can help you make good decisions about what kinds of coverage you need.

Here is what you need to know to understand collision vs. comprehensive insurance better.

Collision Insurance

When there is a collision between your truck and another vehicle or object, collision insurance kicks in. Your policy may cover the costs of repairs or a full replacement of your truck. Collision insurance is not typically required by law but is a good option in many situations. If you are leasing your truck, for example, your bank may require that you carry sufficient collision insurance.

Here are some examples of when collision insurance may cover the accident:

  • You collide with a guard rail on the highway.
  • Your truck smashes into another vehicle.
  • Someone runs their car into your semi-trailer while it is parked.
  • Your truck rolls over while you are driving it.
  • Your strike a massive pothole that causes damage to your garbage truck.

Comprehensive Insurance

When your truck is damaged due to a non-collision event, your comprehensive insurance comes into play. This insurance helps pay for repairs or puts money towards replacing a damaged vehicle.

In most cases, your insurance plan will only cover what your car is worth and not what you paid for it. This means it might not include a total replacement but will help raise funds toward that end. If you are leasing a truck, the payout might be low enough that you have to pay out of pocket to replace the car. In this case, some states allow what is called gap insurance to help make up the difference.

Comprehensive insurance is what drivers call “full coverage.” Here are some examples of when comprehensive insurance may cover the accident:

  • A tree branch falls on top of your truck.
  • Your truck sustains damage due to a natural disaster: storms, hurricanes, tornadoes, earthquakes, hailstorms, etc.
  • Your commercial van is vandalized or stolen.
  • You run into a large animal. Keep in mind, if you swerve to miss the animal and crash into a tree, the damage would most likely fall under collision insurance. If your damage is caused by the impact of the animal into your car, comprehensive coverage is at play.
  • Acts of terrorism. Check with your provider if this is a concern as most companies keep vague definitions of terrorism.

The Major Differences

The amount of control the driver has is the critical factor that determines which type of insurance covers the accident. If the driver is in control, such as running into a guard rail, collision insurance is most likely in play. If the accident is due to events outside of the driver’s control, such as a natural disaster or “Acts of God,” then comprehensive insurance takes over.

A potential scenario that helps illustrate the difference would be driving during heavy winds and rain. While driving, you lose control of your truck and crash into a guard rail. The collision causes extensive damage to your truck. In this scenario, your collision insurance would take charge. Even though the wind storm might be considered a natural disaster, you were still in control as you were driving the car.

In that same scenario, let’s say you decide the weather is far too treacherous to be on the road. You slow down to look for a safe place to park while waiting out the storm. Before you can park, debris from a nearby worksite fly through the air and strike your vehicle causes sizable damage. In this scenario, even though you are driving, comprehensive insurance takes over. You may have had control of the truck, but you couldn’t control the flying debris.

Read More: Know the Right Truck Insurance Coverage for Your Business

Do You Need Both Comprehensive and Collision Insurance?

In general, trucking insurance policies exist to help in case there are significant, costly damages to your vehicle. It’s often advised to carry both kinds of insurance. In the previous scenario, two different types of damage occurred during the same storm. Only having one type of insurance could put you at risk. If you had opted out of a comprehensive policy, the damage from the flying debris wouldn’t be covered.

If you are leasing or financing your commercial truck, you may be required to have both kinds of insurance. The bank or leasing agent will want to protect their investment and ensure sufficient funds are available to repair or replace the vehicle after an accident. If you have a newer truck, the insurance payout might not be enough to replace the vehicle completely, so you might even want to purchase gap insurance to cover the difference.

Are There Times When One Kind of Insurance is Enough?

There are times when it may not be necessary to carry both kinds of insurance. If your truck is worth less than $3,000 or is older than ten years old, it might cost you more to keep your insurance current than it would cost to replace the vehicle. Make sure you have the appropriate savings to cover any damage that your insurance doesn’t cover.

Some might argue that having comprehensive insurance is sufficient. This kind of coverage tends to cover more things that can happen to your truck, including vandalism and theft. If you don’t have to drive that much or go that far, you might decide to skip collision insurance. However, even the safest drivers could still wind up in accidents. Be sure to weigh all of the options and understand the consequences of taking the risk.

Read More: Costly Truck Insurance Mistakes To Avoid

The Bottom Line

There are no one-size-fits-all insurance plans. Evaluate your needs and find a plan that meets those expectations. Your unique situation might require more types of insurance than a similar business. When it comes to protecting your business from accidents, there is no room to cut corners.

Comprehensive Commercial Trucking Insurance

Get the appropriate coverage you need from a trusted insurance provider.