Casco vs. Collision Insurance: What’s the Difference?

Collision insurance and comprehensive (hull) auto insurance are two types of insurance that protect your car from damage. Collision insurance helps cover the cost of repairing your car in the event of an accident. Casco, on the other hand, pays for damages caused by non-accidental incidents such as fire or theft.

While both types of insurance may cover the same car, their protections are different and can vary by state and insurance company.

Highlights:

Collision insurance covers damage from accidents, including collisions with other cars or objects.
Casco protects against damage caused by events such as natural disasters, fires or theft.

If you have a loan or lease a car, both types of insurance may be required, although they are not required by state law.

Collision Insurance

Collision insurance covers damage to your car in the event of:

• Accidents with another vehicle.
• Collisions with objects such as buildings, fences, trees or wild animals.
• Damage sustained as a result of a vehicle rollover.
• Losses if you are damaged by an uninsured driver (in some cases).
• This type of insurance pays for repairs even if you are at fault for the accident. However, it’s worth checking the details with your insurance company, as in some cases, hull insurance may cover damage from collisions with animals (such as a deer).

However, collision insurance does not cover damage to another person’s property or injuries to the driver and passengers. In some states, such as Massachusetts and Michigan, there is a cheaper option for collision insurance that only applies if you are less than 50 percent at fault for the accident.

Cost of Collision Insurance

The average cost of an annual collision insurance policy in the United States was $370.73 in 2020. However, this amount can vary by location. For example, in California it was $501.64, while in Wisconsin it was only $244.82.

Casco (comprehensive insurance)

Comprehensive insurance covers damages from non-accidental accidents. Casco helps pay for repairs in the event of:

• Natural disasters such as floods, hurricanes, hailstorms, and tornadoes.
• Fires.
• Vandalism.
• Theft.
• Damage caused by falling objects or animals.
• Comprehensive insurance can also cover damage to your car’s windows and windshield.

Cost of hull insurance

On average, the cost of comprehensive insurance in the U.S. was $174.26 per year in 2020. Depending on the region, this amount can vary significantly. For example, in California, car owners pay the lowest amount, $97.26, while South Dakota pays the highest, $353.10.

How do I choose between hull and collision insurance?

If you lease or buy a car on credit, you’ll have to take out both types of insurance until you pay off the loan. If you own the car outright, however, you may consider dropping both types of insurance if the value of the car is already low and doesn’t justify the high premiums.

However, it’s important to remember that declining hull or collision insurance means you’ll have to cover the loss out of your own pocket in the event of damage. If the value of your car is under $3,000, it may be wise to forgo these insurances.

Do I need both types of insurance?

If you don’t have a loan or lease, you may want to consider whether it’s worth it to continue paying for collision and hull insurance. If the value of your car is low, it may not make sense financially. However, if you live in an area with a high risk of theft or frequent accidents, additional insurance may be helpful.

What is “comprehensive coverage”?

The term “full coverage” is not an official type of insurance. It usually refers to a policy that includes all mandatory insurances, such as liability and bodily injury, as well as hull and collision coverage.

Third party and their insurance

If you are involved in an accident caused by another driver, you can file a claim with his or her insurance company. If you agree with the insurance payout, you will not have to pay a deductible. If you filed a claim under your own policy first (such as collision insurance), your company may reimburse the deductible later.

Which to choose: a high or low deductible?

A high deductible may lower your insurance premium, but you’ll have to pay more out of pocket in the event of an accident. A low deductible, on the other hand, will increase your premium but minimize your costs in the event of a loss.

Bottom line

Collision and hull insurance are important types of coverage to protect your car. If your car is expensive, it makes sense to continue using them. If your car is old and not worth much, however, these insurances may not make financial sense.