Collision insurance and comprehensive insurance cover the cost of car repairs or replacement of your vehicle.
Collision insurance pays for damage caused by a car accident involving another:
- vehicle,
- person or
- object.
Comprehensive insurance covers damage caused by something other than a collision. Examples include:
- a falling tree branch
- hailstorm damage
- vandalism
Collision and comprehensive coverage are often bundled as a package in California, but they are two separate forms of first-party insurance.
Unlike property damage liability insurance (which covers damage to other people’s property), collision and comprehensive insurance are optional in California. However, lenders may require the purchase of collision and comprehensive policies before they will finance the:
- purchase of a new vehicle, or
- lease of a new vehicle.
The cost of collision and comprehensive insurance in California depends primarily on two factors:
- The policy limits (usually the current market value of the vehicle), and
- The amount of the deductible you selected (the higher the deductible, the lower the cost of the insurance).
To help you better understand comprehensive and collision insurance, our California personal liability lawyers discuss the following, below:
- 1. What is collision insurance?
- 2. What is comprehensive insurance?
- 3. What does physical damage insurance cover?
- 4. How do these differ from liability insurance?
- 5. Do I have to carry collision coverage?
- 6. How much does collision insurance cost?
- 7. Can a body shop waive my deductible?
- 8. What if my car is totaled?
- 9. Do I have the right to keep a totaled vehicle?
- 10. What if I disagree with the decision to repair or total my car?
- 11. Will my premium go up if I make a claim?
- 12. What if a claim is only partially my fault?
- Additional reading
1. What is collision insurance?
Collision insurance is a type of physical damage insurance for motor vehicles. It pays to repair or replace your car, truck, van or motorcycle after it collides with:
- Another vehicle,
- A pedestrian, or
- Any other property (such as a fence, gate or garbage can).
2. What is comprehensive insurance?
Comprehensive insurance is another type of physical damage vehicle insurance. It pays to repair or replace your vehicle after it is damaged by something other than a collision, such as:
- Hail,
- Flooding,
- Fire,
- Falling trees or branches,
- Theft,
- Vandalism (such as keying or stolen tires), or
- Other covered events not caused by you.
3. What does physical damage insurance cover?
Collision and comprehensive insurance pay for the lesser of:
- The cost to repair your vehicle to its current condition, or
- The cost to replace your vehicle if repairs exceed a certain percentage of the vehicle’s value (that is, the vehicle is a “total loss.”).
The insurance company will not pay in excess of your policy limit. As the policy limit is usually the current market value of the vehicle, this is seldom an issue.
4. How do these differ from liability insurance?
Liability insurance covers damage to other people and their property when you are at-fault for an accident; it does not pay for damages to your car. Liability insurance also does not pay for damage to your vehicle caused by so-called “acts of God” or acts such as theft or vandalism.
Therefore if you are at fault for an accident, your liability insurance will cover damages to the other driver’s car. Your own insurance will only pay your car repair bills if you elected to purchase (and paid for) collision coverage.
If the other driver is at fault, their liability insurance will pay your car repair bills. If the other driver does not have liability insurance, you can look to your collision insurance.
5. Do I have to carry collision coverage?
Collision and comprehensive coverage are generally optional in California.
An exception is a vehicle that is financed. Lenders will usually require that you carry collision coverage during the term of the loan or lease.
Otherwise, the decision whether to purchase collision and/or comprehensive coverage is personal.
If a vehicle is not worth very much, it may not be worth the cost.
It all depends on what you can afford and the risk of a covered event that would require the vehicle to need repairs or replacement.
6. How much does collision insurance cost?
Although commonly sold as a package, collision and comprehensive insurance may be purchased individually. The cost for each depends on the current market value of the covered vehicle and the deductible you elected.
The deductible is the amount you have to pay out of pocket before the insurance will pay any money toward a covered claim. The higher the deductible chosen, the lower the cost of the insurance will be.
Common deductible levels for collision insurance in California are $100, $200 or $500. Common deductible levels for comprehensive insurance are $200, $500 or $1,000.
Example: During a violent windstorm, a branch falls off a tree and damages Veronica’s car. The auto body shop estimates $5,000 to repair the damage. Veronica has comprehensive coverage with a $500 deductible. Her insurer will pay $4,500, either directly to the auto body shop or to Veronica.
7. Can a body shop waive my deductible?
Sometimes a body shop will agree to waive your deductible. This is usually legal as long as the repair shop’s estimate was not inflated for that purpose.
8. What if my car is totaled?
Sometimes the cost of repairing a vehicle is more than its value. In such a case the car will be considered a “total loss” vehicle.
There is no set formula for when a vehicle is a total loss in California. Every insurer has its own policy.
In general, a vehicle is considered a total loss if the cost to repair the vehicle is more than about 3/4 of the car’s actual cash value plus its salvage value. The salvage value is the amount the car is worth in its damaged state. This is usually the value of the scrap metal or, in some cases, the resale value of desirable, undamaged parts.
An approximate formula for when a car is considered totaled is:
Cost to repair ≥ .75 X (car’s actual cash value + salvage value)
Example: Bill falls asleep at the wheel one night and crashes his 2010 Lexus 350 into a highway divider. The car’s actual cash value is $15,000. Its salvage value is $2,000. Bill’s car is, therefore, a total loss if the cost to repair it equals or exceeds about $12,750 (.75 X $17,000).
9. Do I have the right to keep a totaled vehicle?
Yes, but the salvage value will be deducted from the settlement. In essence, you are “buying back” your vehicle for the salvage value.
You are then responsible for re-registering the salvaged vehicle with the California Department of Motor Vehicles.
There may be costs associated with obtaining a salvage certificate or registering your repaired vehicle for use. See the above link for details.
10. What if I disagree with the decision to repair or total my car?
Sometime you may prefer to have a car declared a total loss when the insurer wants to repair it. This most frequently happens when the car has sustained frame damage and you are concerned about being able to sell the vehicle later, even if it is repaired.
Or conversely, you may want to keep a vehicle for sentimental reasons even though insurance considers it a total loss.
Unless the car is financed, you have the right to keep the car and have the insurer pay the lesser of:
- The car’s cash value (before the damage) less salvage value, or
- The insurer’s estimate of the cost to repair the vehicle.
You can then do whatever you want with the vehicle.
Of course the challenge is getting the insurer to agree with your valuation of the vehicle.
An experienced California car accident lawyer can often help convince the adjuster the car is worth more or that it should pay for a total loss rather than repairs, or vice versa.
11. Will my premium go up if I make a claim?
The short answer is – it depends. Frequency and severity of claims are just two factors among many that determine the rates you pay for auto insurance.
One claim for bumper damage from a deer running in front of your car may not affect your rates. However, more than one claim in several years might affect your premium.
12. What if a claim is only partially my fault?
California’s “shared fault” law makes it possible to apportion liability for an accident among more than one party.
If you were only partially to blame for an accident, you may be able to recover some of your damages from another driver. Your own collision policy may then make up the difference.
The same may be true for comprehensive coverage. For instance, if a branch from a tree on someone else’s property falls onto your car, the other property owner might be legally liable in whole or in part under California premises liability laws.
Additional reading
For more in-depth information, refer to these scholarly articles:
- Consumers’ collision insurance decisions: a mental models approach to theory evaluation – Journal of Risk Research.
- The Costs of Consumer Choice for Auto Insurance in States without No-Fault Insurance – Maryland Law Review.
- Automobile Injuries as Injuries with Remedies: Driving, Insurance, Torts, and Changing the Choice Architecture of Auto Insurance Pricing – Loyola of Los Angeles Law Review.
- Environmental Insurance Coverage under the Comprehensive General Liability Policy: Does the Personal Injury Endorsement Cover CERCLA Liability – UCLA Journal of Environmental Law & Policy.
- Is an Award of Punitive Damages Covered under an Automobile or Comprehensive Liability Policy – Southwestern University Law Review.