Car insurance is an important investment that keeps you financially secure to tackle expenses related to damage or mishap involving your car. It provides financial coverage against damage or loss caused by unforeseen accidents, theft, or other covered events. While looking to buy a car insurance policy, it is important to know the different types of insurance policies available. Collision and comprehensive insurance are two types of motor insurance policies. Though both types secure a car, their coverage differs significantly. Collision insurance is more popular in abroad, and still very new to India.
Understanding the difference between collision and comprehensive insurance is crucial to determine which coverage is best for your car.
What is collision insurance?
Collision insurance is a type of car insurance. It covers the cost of repairing or replacing your car if damaged in a collision with another vehicle, object, or has rolled over. It is not necessarily required under the law, but it is mandatory if the car has been financed through a loan or lease.
Collision insurance covers damage to your vehicle regardless of fault in the accident. If there is a collision, your insurance company will cover all repair costs up to the policy limit minus your deductible. For instance, suppose a car is damaged due to an accident, the repair cost comes up to Rs. 50,000, and you have a deductible of Rs. 10,000. The insurance company will pay Rs. 40,000.
What is comprehensive insurance?
Comprehensive insurance, also known as 'other than collision,' is a type of insurance coverage that covers damages caused from accidents, natural calamities, and man-made activities. It is an optional coverage and also covers theft, vandalism, fire, floods, or falling objects.
Comprehensive car insurance also compensates for the car damages up to the policy limit minus your deductible.
