In general, collision insurance covers damage to your vehicle that is caused by colliding with another vehicle or object. In the event of an accident, your collision coverage will pay out for damages minus the amount of your deductible. Of course, to keep car insurance premiums low, you may wish to consider opting for a larger deductible, but be sure to select an amount low enough for you to afford should an accident occur. For older or less valuable cars you may deem collision coverage unnecessary because the payout will only cover the maximum damages of the car; in other words, if your car is only worth $1,000, that is what the maximum payout will be.

Collision coverage is usually not required by state law; however, if your car is financed or leased, the finance company will often require that you carry collision car insurance. Comprehensive car insurance covers damage to your vehicle caused by anything other than a collision. This could include damages resulting from vandalism, fire, flood, theft, glass breakage, or animals, including a direct collision with an animal. The reason an animal-related accident is not covered by collision insurance is because it falls under the category of limited driver fault.

Like collision insurance, comprehensive insurance is not usually required by state law, but it is highly recommended for vehicles of higher value because the coverage may cover all costs in the event that your car is stolen or irreparably damaged. In some cases, car insurance companies may not sell comprehensive coverage without collision coverage; whereas in other instances, it may be required by the car insurance company that you select the same deductible for both kinds of insurance. In order to make an informed decision as to whether or not collision and comprehensive insurance are worth purchasing, you must consider the value of your vehicle and its relationship with the cost of your deductible and premium costs. An older or low-value vehicle typically has no need for comprehensive and/or collision auto insurance, so the legal minimum is often a good option.