Collision vs. Comprehensive Physical Damage Coverage
When you think of commercial truck insurance, you most likely think of the two main types: collision and comprehensive physical damage. These are the two primary forms of coverage that protect you when your commercial truck is damaged. The kind of damage they cover, however, can be vastly different.
You might also find that some basic insurance plans offer differing amounts of coverage, depending on your policy. In some cases, your plan may not come with both types, and one needs to be added. Here is what you need to know to understand the difference between these two types of coverage.
Collision insurance comes into play when there is a collision with another vehicle or object. If your accident is covered, your insurance policy may cover the cost of repairs or a full replacement of your car or truck. Collision insurance isn’t always required by law, but it is a good idea. For example, if you are leasing your vehicle, the bank or dealership may request that you carry this coverage.a
Some examples of where collision insurance comes into play are:
- Your truck runs into a guard rail.
- Your car collides with another vehicle.
- Another car crashed into you while you are parked.
- Your truck rolls over while you are driving it.
- You hit a large pothole that causes damage to your car.
Comprehensive Physical Damage Insurance
Comprehensive insurance comes into play when there is damaged caused to your truck by non-collision based events. It helps pay for repairs or puts money towards replacing your vehicle. Most often, comprehensive insurance plans cover the cash value of your car, not necessarily what you paid for it.
If you are leasing a vehicle and experience a non-collision event that destroys your vehicle, your insurance plan may not pay out enough to replace the car. This could put you on the hook for the remaining amount. Some states allow you to purchase additional insurance, such as gap insurance, that helps make up this difference. When someone adds comprehensive insurance to their policy, they are often considered to have “full coverage.”
Some examples of where comprehensive physical damage comes into play are:
- A tree falls on top of your car.
- Your truck is damaged due to a natural disaster: storms, tornados, hurricanes, earthquakes, hailstorms, etc.
- Your car is vandalized or stolen.
- Impact with an animal. Keep in mind, if you swerve to miss an animal and crash into an object, this will most likely fall under collision insurance.
- Acts of terrorism (most companies have vague definitions of terrorism; make sure to double-check with your provider if you have questions).
What’s the Difference?
The dominant player in determining if an event falls under collision or comprehensive insurance is the extent of the driver’s control. When a driver is in control, the damage should be covered by collision insurance. If the event falls outside of a driver’s control, often considered “acts of God or nature,” the damage is covered by comprehensive insurance.
For example, if you are driving during a massive storm, a couple of things might happen. First, lawn furniture from someone’s lawn might blow out into the road and strike your car breaking your windshield or causing other damage.
The other thing that might happen is that a tree fell into the street. To avoid hitting the tree, you swerve and subsequently run into a mailbox. In the first scenario, you didn’t really have control over the situation.
Your comprehensive policy should cover the damage. In the second scenario, you were in control of the vehicle, even though the falling branch was outside of your control. Your collision insurance would come into play here. Even though these events happened during the same hypothetical storm, there are distinct differences as to what is covered by each kind of insurance.
Do You Need Both Kinds of Coverage?
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. It is especially important to have both if you lease or finance your truck, have a vehicle that is younger than ten years, or your car is worth more than $3,000.
If you lease your car, you may be required to have both kinds of insurance. The bank or leasing agent wants to protect their investment and ensure there are sufficient funds available to repair or replace your car. If your vehicle is worth less than $3,000 or is older than ten years, you might end up spending more on insurance premiums than your car is actually worth. You should also consider that collision claims are often higher than comprehensive ones.
Some people will argue that just having comprehensive insurance is enough. Comprehensive coverage tends to cover your vehicle for more items, including theft and vandalism. You have to consider the risk of being in an accident. Those who don’t drive very often or don’t go very far may find the risk of a collision to be lower. Those who drive commercially or longer distances are certainly at a higher risk of an accident.
You should also consider if your current savings would cover the cost of an accident if you have to pay out of pocket. Could you cover replacing a car if it were stolen and you didn’t have comprehensive insurance?
Other Types of Trucking Insurance
Beyond collision and comprehensive insurance, there are a variety of other options. Liability insurance, for example, is required in most U.S. states and covers damage or injuries to others caused by your at-fault accident.
Many drivers also opt to add uninsured or underinsured motorist insurance as well. This insurance helps you cover damages if the at-fault person doesn’t have sufficient coverage to pay for everything. There are, of course, additional kinds of insurance you can add to your policy, but it’s best to talk with an experienced insurance provider to examine your needs and best recommend options.