Difference between collision and comprehensive

If you’ve ever renewed your car insurance and stared at the words collision and comprehensive, thinking, “I should probably know what these mean… but I don’t,” you’re definitely not the only one.

They’re two of the most common optional coverages in Canada. And they’re also two of the easiest to mix up. Both protect your car and cost extra money. But they apply in completely different situations. Read on to learn the difference between collision and comprehensive and how to decide whether you need them.

What are comprehensive and collision insurance?

Collision and comprehensive are both ways to protect your own vehicle when it’s damaged, just in very different situations. Both are forms of physical damage coverage for your car, which is different from liability insurance because that only pays for damage or injuries you cause to other people.

Unlike liability, collision and comprehensive are both optional. But what they cover will depend on your insurance provider and your exact policy wording. Let's take a closer look:

Collision coverage

This coverage:

• Pays to repair or replace your own vehicle if it’s damaged in a collision with another vehicle or object.

• Applies regardless of who is at fault in an accident

• Does not cover theft, vandalism, weather damage or non-collision risks

Comprehensive coverage

This coverage:

• Pays to repair or replace your vehicle for damage that is not caused by a collision

• Commonly covers things like vandalism, theft, fire, hail, falling objects and some animal strikes

What do collision and comprehensive insurance cover?

Here’s what each one typically covers, depending on your policy:

Because insurance policies can differ between insurers and provinces, it’s always wise to review your own wording or speak with a broker about how coverages apply where you live.

Collisions with wildlife

Some insurance companies include animal strikes, like hitting a deer, under comprehensive or specified perils rather than collision. That’s because it’s generally considered an uncontrollable event rather than a conventional crash. Either way, you should always check your policy to see how your insurer defines it.

Does collision or comprehensive insurance have a deductible?

Yes. Both collision and comprehensive come with deductibles, which are the amounts you pay before insurance steps in if you need to file a claim. In Canada, car insurance deductibles usually fall somewhere between $250 and $2,500, depending on the province, the insurer and the type of claim. But most people end up with something around $500.

A higher deductible usually brings your premium down, but it also means you’re on the hook for more if you have a claim. A lower deductible costs more month to month, but softens the hit when something goes wrong.

How does this affect what you pay?

How much these coverages cost depends on things like your car, your driving history, where you live, the deductible you choose and your past claims. Because collision coverage deals with crashes and driving risks, it usually costs more than comprehensive coverage.

If you’re thinking about changing your auto coverage, it can help to look at a few quotes with different deductibles, like $500, $1,000 or $2,000. That way, you can see what you save each month and what you’d have to pay if something actually happens.

Why does leasing or financing change what you need?

Even though neither collision nor comprehensive coverage is required by law in Canada, many leasing companies and lenders make them both mandatory requirements. If you’re financing or leasing a vehicle, your lender wants to know the asset is protected in the event of damage or loss, because it technically still owns the car until your loan is paid off. A typical lease or loan agreement may state that:

• Collision coverage is required until the loan is paid

• Comprehensive coverage must also be maintained throughout the loan

• The lender may be listed as a “loss payee” on the auto insurance policy to protect their financial interest

If you drop one of these coverages while you still owe money, you could be in breach of contract and that’s something you don’t want to discover after an accident. Always check your lease or financing agreement’s fine print before changing your coverage.

You can then drop both once the car is paid off, but it’s important to think about what that risk would mean for you.

Do the risks (and costs) change depending on where you live?

Yes. And this is one of the biggest reasons people with similar cars can pay very different prices for the same insurance coverage.

Where you live affects what your car is actually exposed to day-to-day and insurers will price your premium around that risk. Take a look:

Prairie provinces

In the Prairies, especially in southern Alberta and parts of Saskatchewan, hailstorms and strong winds are just part of life. That kind of weather is hard on cars. Damage from hail, falling branches or flooding tends to be more common.

Snowbelt and high-ice regions

Along the coasts, heavy rain, windstorms and salty air take a toll. Falling branches, storm debris and water damage are more likely than in drier or calmer climates.

Coastal regions

Salt air, heavy rain, windstorms and flooding can all contribute to higher comprehensive risk. Falling branches, storm debris and water damage are more common concerns in these regions.

Large urban centres

Big cities come with their own set of risks. There’s more traffic, more tight parking and more people around your car. That means a higher chance of things like break-ins, vandalism, parking lot dings and minor collisions.

Rural and northern areas

Wildlife collisions are more common in rural parts of Canada. When deer, moose or elk regularly cross the road, animal strikes become a real risk and one that physical damage coverage is meant to help with.

How does public vs. private insurance change what you already have?

Not all provinces use the same insurance system and that affects how much protection your car already has. In public-insurance provinces, a basic plan usually includes some level of vehicle damage coverage with set deductibles and limits. For example:

• Manitoba (MPI) includes all-perils coverage

• Saskatchewan (SGI) includes basic auto damage

• British Columbia (ICBC) includes basic vehicle damage

Though many drivers still add optional protection for things like collisions, theft and weather. In private-insurance provinces like Ontario, Alberta, Quebec and the Atlantic provinces, mandatory coverage includes things like:

• Third-party liability coverage

• Accident benefits coverage

• Uninsured motorist coverage

• Direct compensation-property damage coverage

The last two can pay for your car in some situations, such as when another insured driver is at fault or in certain hit-and-run or uninsured cases. But it doesn’t protect your car if you’re at fault or if damage comes from things like theft, weather or vandalism.

That means in public systems you’re choosing to top up existing protection, while in private systems, comprehensive and collision coverage are the only ways to insure your car against most damage scenarios.

Do you actually need both types of coverage?

There’s no single answer that fits everyone. But here are some things to think about before you decide:

When it makes sense to have both

Consider adding both coverages to your policy if:

• If you own a leased or financed vehicle

• If you own a new or high-value vehicle (e.g., high repair costs, you want full physical damage protection)

• If you drive often or commute long distances

• If you live somewhere with a high risk of theft, vandalism, ice, hail or wildlife activity

When you might drop one or both

Having both might not be necessary if:

• If you own an older vehicle with low market value

• If you’re comfortable paying out of pocket for repairs or replacement

• If you park in a secure garage, drive infrequently and have a spotless record

If you’re on the fence, a broker can help you compare quotes with different deductible levels and show you what each option would actually cost.

Contact BrokerLink today

Knowing what collision and comprehensive actually do can make it easier to choose coverage you feel good about. If you want a second opinion or want to compare different options, contact BrokerLink. Any one of our licensed insurance advisors can help you look at what fits your needs and budget.

You can reach us by phone, email or in person at any one of our locations throughout Canada. You can also try out our free online quote tool that can provide you with a competitive car insurance quote in minutes.

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