Collision Insurance

 

What is collision insurance?

Collision coverage assists with the repair or replacement of your car if it is damaged in an accident with another vehicle or a fixed object such as a tree, railing, or fence. Damage from a single-car collision, such as a rollover, is also covered. It is typically needed if you lease or finance your vehicle.

 

What does collision insurance cover?

Collision refers to a variety of driving incidents including:

  • Accidents involving other motor vehicles (cars, motorcycles, RV's)

  • A collision with another item other than a motor vehicle (mailbox, garage, house, tree, guardrail, street sign, utility pole, pothole, etc.)

  • Damage caused by a hit-and-run (including in parking lots)

  • Some carriers also cover pet injuries

Is it smart to purchase collision insurance?

Aside from your home, your automobile is frequently your most expensive asset.  If your automobile is damaged or wrecked in an accident and you do not have collision coverage, you may be out thousands of dollars to repair or replace the vehicle.

While collision coverage raises the cost of your auto insurance, it protects your vehicle. If your vehicle is totaled, it will cover the cost of replacing the vehicle. If you have a lease, collision coverage will pay off your loan. That is why, whether you lease or have a loan on your car, almost all lenders will require you to add collision coverage to your insurance policy.

When should you not purchase collision insurance?

If your automobile is paid off, there are just a few instances in which you should consider not having collision coverage. Here are examples:

  • If the value of the vehicle is less than a few thousand dollars, carrying collision on your insurance may be an unneeded safeguard, especially if you have a high deductible. For example, if your automobile is worth $2000 and you have a $1000 deductible, the maximum your insurer would pay out on a collision claim is $1000, so it might not be worth the expense of the coverage.

  • If your car is in storage, collision coverage is not required. You can call your carrier and add coverage when the vehicle is taken out of storage. Comprehensive coverage protects your vehicle against theft, vandalism, fire, glass breakage, and weather-related damage that may occur while it is parked so it's important to consider comprehensive insurance even if the vehicles is in storage.

  • If your vehicle is listed on a family member's insurance, has collision coverage, and is stored overnight at the location you share with that family member, you may not need to add collision to your own policy. Check that you are listed as a driver on that person's insurance, then speak with your insurer or agent to confirm that you and your vehicle are appropriately covered.

Is collision insurance required for an ancient car?

When selecting on collision coverage, the age of your car isn't important, the value of the car is what is important. If your old vehicle has been paid off but has been well-maintained and has few miles, the vehicle value is likely high enough that you would want coverage.

Regardless of the age or value of your vehicle, if you don't have the money to quickly purchase a new vehicle if your vehicle is totaled or if you can't pay accident repairs, you probably want to add collision coverage. If you do decide to not get collision insurance, make sure you have enough money available for emergency auto repairs or a new vehicle, if required.

What is the difference between comprehensive and collision coverage?

Comprehensive insurance protects you against uncontrollable occurrences like as theft, vandalism, animal contact, glass breakage, fire, and weather-related catastrophes. Collision coverage protects your automobile from damage caused by colliding with another vehicle or object, regardless of fault. Some insurers demand comprehensive coverage if you purchase collision; however, you may get comprehensive coverage independently.

 

Common collision coverage questions:

 

  • What is the cost of collision coverage? Collision insurance costs around $60 per month on average but will vary significantly based on the vehicle value and other factors like your age and driving history.
     

  • Will my collision coverage apply to a rented car? Yes, if you rent a car, it will be insured in the same way as you would if you were driving your own automobile.
     

  • What if I wasn't at blame for the accident? If another motorist hits your car and is found to be at fault, their insurance company should pay for the repairs. If the at-fault driver does not have insurance or not enough insurance, and you do not have uninsured motorist property damage coverage, your collision policy may cover the cost of repairing or replacing your vehicle.
     

  • Which deductible should I select? Choose a deductible that you can afford. While a larger deductible can decrease your premium, the savings may not be worth the money you'll have to pay out of pocket if you have a collision claim. Consider the value of your automobile and how much you're prepared to spend out of pocket when deciding on a deductible. Learn more.
     

  • Will collision pay off my auto loan or lease if my car is totaled? Your vehicle's fair market value will be paid out if you have auto collision insurance. If it isn't enough to cover what you owe on your auto loan, gap coverage might assist cover the difference.