What is collision coverage?
Collision coverage covers your insured vehicle for physical damage that your car sustains when it hits, or is hit by, another vehicle, or another object. Collision also covers the upset of your vehicle, such as the unintentionally rolling or flipping of your vehicle.
Your property damage liability coverage does not cover your vehicle in any way; it only covers those that you hit. For auto accident damages to your vehicle to be covered by your auto policy, collision coverage is needed.
Collision coverage allows you to file a claim with your car insurance company and have it pay, minus your deductible amount, for damages received in most auto accidents. Collision will pay out, according to the terms and conditions of your policy, if the other driver is uninsured, underinsured, or unknown — or even if you are at fault.
Collision doesn’t cover any and all damages that your vehicle may receive. To have “full coverage” on your car you would also need to carry comprehensive insurance, which covers your car if it is stolen or damaged by vandalism, flood, fire, or animals.
Keep in mind, not every issue with your vehicle is covered by collision or comprehensive insurance. For instance, damages caused by wear and tear, freezing or mechanical breakdown are not covered by either coverage — or any other portion of an auto insurance policy.
When receiving a quote for collision coverage, you will need to choose a deductible amount. A deductible is the portion of a claim that you’re responsible for paying before your insurance coverage kicks in.
Is collision coverage mandatory?
Collision insurance is not required by any state. Most states require property damage liability so that your insurer will pay (up to your limits) if you damage other people’s vehicles or property, but states do not mandates that you carry coverage to pay for damages to your own car.
However, if you have a loan or lease on your vehicle, then your lienholder can (and usually will) require that you carry this coverage and may mandate the specific deductible amount you have to select.
If want to lower your insurance premium by raising your deductible, while your car is still financed, be sure to check with your lienholder to see if they will allow a higher deductible than what you are currently carrying.
What is the recommended deductible?
Collision coverage does not come with limits; instead, the most it will pay you is the actual cash value of your car, minus your deductible, if it is declared totaled. Experts typically recommend a $500 deductible unless you have substantial savings to tap. If you have put a minimal down payment on a car, you should consider gap insurance.
Typically, the range you can choose for your collision deductible is anywhere from $100 to $2,500 (deductible choices vary according to state laws and insurance company guidelines). Most car owners choose a deductible of between $250 and $1,000.
In general, the higher the deductible the less expensive your premium and the lower your deductible the higher your collision premium – since the insurer is taking on more risk. So, a higher deductible can substantially lower the cost of insurance premiums, but you’ll have more to pay out-of-pocket before your collision benefits kick in.
When picking a deductible amount, find the right balance for your finances. For example, if you set your deductible at $1,000 and your car sustains damages totaling $1,500, you will pay $1,000 and your insurance company will pay $500. Deductibles are due per incident, so you will have your deductible amount due each time a collision claim is made. If you raise your car insurance deductible to lower your rates, you can save, on average, about 10 percent, but in some cases it can be much more.
How much does collision coverage cost?
According to a CarInsurance.com rate analysis, the average rate for collision coverage is $526 per year, for a full coverage policy with a $500 deductible. You’ll see below how states compare for the cost of collision. Enter your state in the search field to see what you can expect to pay.
Average price of collision coverage by state for 2018
Collision Insurance Definition
Collision Insurance Definition
- Date: December 16, 2013
- Posted by Aaron Mattson
- 0 Comments
- Tags: collision coverage, collision coverage definition, collision insurance, should i get collision coverage, what is collision coverage, when to drop collision and comprehensive coverage, when to drop collision coverage, when to drop collision insurance,
The Definition of Collision Insurance
Collision insurance protects auto owners in the event of an accident where there is damage to their cars. There is a large number of people who are sure they’ll never get into an accident or wreck their own cars, but according to market research studies, the average American driver is involved in a car accident every ten years. Your driving habits can also be a factor in how likely you are to get into an auto accident, such as if you drive late at night when drunk drivers may be out on the road, or if you drive in an urban area and park your car on the street. It’s a wise decision to have collision coverage on a car that’s fairly new or worth more than a couple thousand dollars.
In addition to covering the damage that you cause to your own vehicle, collision coverage protects you in the case of accidents that aren’t your fault, too!
Collision Insurance Helps When:
- YOU cause an accident, and pays for the damage to your vehicle
- If you cause an accident and wreck your car, your insurance will pay to repair your vehicle as a condition of your collision coverage. If you’re the repairs cost more than the market value of your car (otherwise known as “totaling” your car), your insurance provider will give you the money to replace your car, based on how much your car’s make and model is currently worth.
- ANOTHER DRIVER causes an accident, and pays for the damage to your vehicle
- If your car is damaged because another driver caused an accident, your insurance provider will pay for your damages to expedite the process, then pursue the other driver’s insurance company for reimbursement.
- This option isn’t the default protocol for such a procedure, but is something that you can demand of your insurance provider if the other driver’s insurance is being slow or difficult in covering the cost of your repairs. When you have collision coverage, this is an aspect of protection to which you’re entitled.
- Although this option shouldn’t be a reason for your provider to raise your premium rates, since the accident wasn’t your fault, make sure you check with your insurance adjuster before taking this approach.
- OTHER ELEMENTS cause damage to your car that aren’t covered by other parts of your policy
- If you don’t have comprehensive coverage for instances such as vandalism, natural disaster, theft, etc., you can usually claim those kinds of losses under your collision coverage.
- Hit-and-run accidents or damage to your car caused by an uninsured driver would also usually fall under collision coverage.
- Using your collision coverage to cover these kinds of incidents may cause your rates to increase, because your insurance company may process the claims as if you were at fault for the damage. Having comprehensive and underinsured motorist insurance is the safest way to cover yourself in these types of scenarios.
Now that we’ve explained the collision insurance definition, we’re going to look at when to drop collision coverage on your vehicle in our next blog! Check back in with us on Wednesday for more!
Comprehensive and Collision Insurance
Collision and Comprehensive Coverages
When you cause an accident, your first concern will probably be how you’ll pay for the other driver’s damage. If you have liability coverage, this will hopefully cover all of those costs. However, if liability is all you have, you could be left with no way to pay for your own damages.
While most states only require you to be covered for injuries or damage you cause to another person, not many states have requirements in place for damages you incur.
Insurance coverage for your car is considered optional and comes mainly in the forms of collision and comprehensive coverages. Based on the coverage, you’ll have protection for damages incurred in a crash or other unforeseen events.
Collision Insurance Coverage
Collision coverage will help pay for repairs to your car (as well as replacement costs, in the event your car is totaled) after:
- Crashing into another car.
- Crashing into an object.
- Rolling over.
NOTE: If your car is damaged in a hit-and-run incident, you will generally be covered through collision coverage. However, this may not be the case in no-fault states or other states.
Most car insurance companies do not provide coverage for pets injured in a car accident. However, some car insurance companies do offer coverage for pets as part of collision coverage. Keep in mind that this coverage tends to be limited and often does not meet the veterinary costs you are likely to face if your pet gets hurt in a crash.
Your best option for your pet is purchasing a separate pet insurance policy that will cover veterinary expenses.
Comprehensive Insurance Coverage
Comprehensive coverage will help pay for repairs to your car or replacement of your car after it’s been damaged by events that aren’t accident-related.
Typically, with comprehensive coverage you’ll be covered for damage from the following:
- Falling (missile) objects.
- Hitting or being hit by an animal including deer, cows, bears, moose and birds.
- Natural disasters.
Note that not all policies are the same. Before purchasing comprehensive coverage, make sure you know what your comprehensive policy will cover.
Glass Repair and Replacement
Have a crack on your windshield? Glass repair and replacement is typically covered through your comprehensive coverage.
Generally, most car insurance companies will waive your deductible for glass repair if your crack is smaller than a dollar coin. If the crack is larger, your windshield will need to be replaced and you will likely be required to pay your deductible.
Some insurance providers may cover glass repair and replacement differently. For example, a car insurance company may offer glass coverage completely separate from your comprehensive coverage. Contact your agent to learn more.
Shopping for Collision and Comprehensive Coverages
Car insurance companies typically sell collision and comprehensive coverages together. You may find these coverages packaged together as “physical damage coverage.“
When you’re shopping around, remember:
- Physical damagecoverage refers to coverage that pays your own costs.
- Liability coverage refers to coverage that pays others’ costs.
Most companies will not allow you to buy collision coverage without buying comprehensive coverage; however, some may offer policies that have comprehensive and not collision coverage.
When shopping for collision and comprehensive coverages, consider whether you need these coverages and how high you want your deductibles to be.
Because comprehensive and collision are optional types of car insurance coverage, you should consider some factors before determining whether or not you need to purchase these coverages.
Your Car’s Value
The value of your car is an important consideration when determining whether you need collision and comprehensive coverage. If you car is:
- Older and/or low-value, it may not be worth purchasing these coverages, since they will only pay up to the estimated fair market value of your car.
- Newer and/or high-value, having these coverages can save you from paying out significant costs to repair or replace your car (if totaled)*.
* If your car is totaled, your collision and comprehensive insurance will only pay you the estimated fair market value of the vehicle. If you have a loan or lease, consider gap coverage, which will pay the difference between your how much you owe and the car’s cash value.
Your Driving Habits
You should also consider what you put your car through on a daily basis. For example, if you drive a lot of miles, or if you park your car in a location that is especially susceptible to theft or vandalism, you might want to have comprehensive coverage.
NOTE: While these coverages are not mandatory in any state, they are generally required as part of a car loan or lease agreement.
Choosing Your Deductibles
A deductible is the amount towards a claim that you are responsible for out of pocket before your insurance pays out. Collision and comprehensive insurance coverages require you to pay a deductible whenever you make a claim towards either coverage.
Insurance companies often offer different set options for how high your deductible is.
Choosing a higher deductible lowers your premium.
Keep in mind, however, that a high deductible means you are paying more out of pocket towards a claim. If you choose a high deductible in order to save money on your premium, make sure you have enough money saved to pay your deductible when you need your insurance.
Simply meeting your state’s car insurance requirements may not provide you with enough protection. When comparing car insurance quotes, consider carefully how much coverage you need and whether collision and comprehensive coverages are right for you.
What is Collision Insurance?
YouвЂ™ve been involved in a serious accident. Car vs. tractor trailer. He changed lanes and didnвЂ™t put on his blinker. Now youвЂ™ve got an aching neck, a damaged car, and a pile of bills mounting up. But you were smart enough to get good insurance coverage. Yet you are still a little confused about the type of coverage you actually purchased. You made a claim with your insurance agent, but now you are even more confused. After your conversation, you may be wondering, what is collision insurance? Not to worry. Below you will find important information about collision insurance and its definition, the difference between collision and comprehensive, and where to go if you think you need an attorney.
Collision Insurance Defined
There are several common types of automobile insurance coverage categories: bodily injury, personal injury protection (PIP), and uninsured motorist (UM), just to name a few. Collision insurance is one of those types of coverage and pays for damages to your vehicle when you are the at-fault driver. LetвЂ™s say you hit another car or a streetlight. Collision insurance will cover the cost of repairs or replacements to your own car.
What about the other personвЂ™s vehicle or the downed street light? Typically liability coverage will handle their claims. Collision coverage is primarily for your vehicleвЂ™s damage, minus any deductible you will have to pay out-of-pocket. Keep in mind that while collision coverage is generally optional, it may be mandatory if you are financing or leasing your vehicle.
Collision Insurance vs. Comprehensive Coverage
So, how is this different than comprehensive coverage? After all, isnвЂ™t comprehensive coverage just that? Coverage that includes everything? Not quite. Comprehensive coverage means your insurer will reimburse you for damage to your vehicle caused by anything other than the accident itself such as theft, vandalism, a tree falling on your car, or other acts of God (hail, flood, earthquakes, and explosions).
What IsnвЂ™t Covered By Collision Insurance
There are a number of incidents that are not covered by collision insurance. Other types of insurance may apply in these situations. Collision coverage does not cover:
- Expenses related to bodily injury
- Damages to your vehicle when it is not being driven (theft, vandalism, acts of God or nature)
Benefits of Collision Coverage
While it does mean you will pay a little more on your insurance premium, collision coverage can really come in handy when you need it. You get the benefit of avoiding out-of-pocket expenses for your vehicle damage, minus the deductible. You also get coverage for your vehicle if it is deemed “totaled” — i.e. your car isn’t repairable or costs more to repair than what it’s worth. Here, the insurer will pay you the retail market value of the car and you are free to buy or lease a new one, if you so choose.
Collision Insurance: Related Resources
Next Step: Get a Free Attorney Match
YouвЂ™ve been in a car accident. YouвЂ™ve made your claim to the insurance adjuster, but now they are talking about collision coverage, uninsured motorist, and deductibles. Why not let an experienced legal professional assist you in getting through your motor vehicle accident? You can begin the process today with a free personal injury attorney match at no obligation to you for the initial consultation.
What is collision insurance?
Let’s start off with a quick definition of collision insurance: collision insurance is a type of auto insurance that can cover you in the event of a crash or accident with another vehicle or object if your car needs to be repaired. Unlike liability insurance, your collision insurance policy kicks in even if you are found at fault. While this collision coverage definition may sound simple enough, collision insurance can apply to a wide range of accident types. Broadly speaking, collision can potentially apply to the following situations:
- An accident involving only your car, such as rolling over
- An accident with another object, such as a phone pole or sidewalk
- An accident with another vehicle, such as a traffic crash or someone hitting your car while it’s parked on the street
Be aware that collision insurance only reimburses you for damage to your car – not for damage to other vehicles or objects, or for bodily injuries sustained in the accident.
Do I need collision coverage?
You may be thinking to yourself, “I’m a responsible driver. Do I really need collision insurance?” While collision insurance isn’t required by state law, it’s always a smart option – with so much on the road that you can’t control, do you really want to risk paying thousands of dollars out of pocket for damage to your car after an accident? Collision coverage helps you protect your investment, especially when paired with liability and comprehensive coverages. If you are leasing your vehicle or making payments (as opposed to owning your vehicle outright), your finance company may require that you purchase both collision coverage and comprehensive coverages. Check with your auto lender about whether collision coverage is required. Collision coverage is especially important for new drivers, such as teens, who have less experience on the road.
What does collision insurance cover?
You already know that collision coverage applies to vehicular damage as a result of an accident with another car or object, or an accident involving only your car. But every accident is unique – so what exactly does collision cover?
Does collision insurance cover theft?
No. Theft may be covered by your comprehensive insurance coverage.
Does collision insurance cover rental car accidents?
If you have a collision coverage, it may cover you in the event your rental car is damaged. However, rental car insurance coverages vary by state. Be sure to check with your rental provider for specifics around rental insurance coverage.
Does collision insurance cover vandalism?
No, collision coverage will not cover vandalism, but your comprehensive coverage may.
Does collision insurance cover other drivers?
No, collision coverage only applies to damages incurred to the policyholder’s vehicle in the event of a covered collision. If you are found at fault in an accident, your liability insurance may cover damages to the other car.
Does collision insurance cover hit-and-run accidents?
It depends on what kind of hit-and-run it is. If a driver hits your car while it’s parked, your collision policy may cover damages to your car. However, it would not apply to bodily injuries sustained as a result of a hit-and-run accident. Collision insurance covers a wide variety of incidents, and can be a smart addition to your car insurance policy. Find out more about Nationwide collision insurance and get a free quote today.
Insurance terms, definitions and explanations are intended for informational purposes only and do not in any way replace or modify the definitions and information contained in individual insurance contracts, policies or declaration pages, which are controlling. Such terms and availability may vary by state and exclusions may apply. Discounts may not be applied to all policy coverages.