A car insurance policy is like a puzzle — it’s comprised of different pieces of coverage that form one policy. The most common types of coverage that can make up your policy are comprehensive, collision, liability, personal injury protection and uninsured/underinsured motorist coverage. Some of these coverages can be optional depending on your situation, including collision insurance. So what is collision insurance and what does it cover?
Collision insurance is a coverage option on your car insurance policy that covers damage to your car from an accident with another car or object. Collision will help you pay for the damages or replacement of your car, up to your policy’s limits, after you pay your deductible.
What does collision insurance cover?
Collision insurance covers your own vehicle in an accident with another vehicle, such as if you were hit by another car or if you backed into another car. It also covers a collision with an object, such as a tree, telephone pole, fence, guardrail or building. Additionally, rollover single-car accidents are covered by the collision portion of your car insurance policy.
Collision insurance doesn’t cover damage caused to another driver’s vehicle, medical expenses or if your vehicle was damaged from anything else that wasn’t caused by a collision when driving.
The purposes of collision and comprehensive coverage often get confused as both cover damage to your car, and insurance companies usually offer packages that include both. An easy way to remember it is that collision covers damage from collision with a car or object, whereas comprehensive covers other damage to your car that wasn’t caused by a collision, such as from theft, hail, vandalism, fire or hitting an animal.
Collision insurance cost
The cost of collision insurance varies based on factors that determine your rates. Your driving history, the vehicle you drive and the deductible amount you choose all affect the cost of your premium for collision insurance. Drivers with a flawed driving record are considered a higher risk and may have higher rates.
Additionally, the higher the deductible you select, the lower your monthly premiums will be. Your car insurance deductible is the amount of money you pay to your insurance company before your coverage kicks in. Collision deductibles usually range from $250 to $1,000.
Collision insurance claim
When involved in an accident that involves a collision with another car, you can file a claim with your own insurance company or with the other driver’s insurance depending on the situation.
If you were at fault in the accident, you should file a claim with your insurance company. If the accident wasn’t your fault, you may choose to file a claim with your own company or with the at-fault driver’s insurance. If you go through your own company, you may have to pay your deductible. A process called subrogation will occur in which a determination of fault of the accident will be made and your insurance company will seek reimbursement from the other driver’s insurance company for your car’s damages.
If you decide to go through the other driver’s insurance, your coverage for damages will depend on the limits of the driver’s policy. You may still end up having to file a claim with your own insurance company. In the event that the other driver’s coverage is not enough to cover your damages, you may need to pay your deductible and use your own collision or uninsured motorist coverage. Even if you choose to go through the other driver’s insurance, you should always call your own company to alert it of an accident. Your rates shouldn’t increase if it’s determined you weren’t at fault.
Do I need collision insurance?
Although collision insurance isn’t required by law, it provides important financial security in the event of an accident. If you’re financing or leasing your car, you’ll likely be required by your lender to have collision insurance coverage on the car.
Even if you aren’t required to have collision coverage, that doesn’t necessarily mean you should go without it. It’s important to determine your insurance needs when buying a car insurance policy so you buy sufficient coverage. Determine how much collision coverage will cost you, considering your driving history and vehicle type. One car accident can lead to a hefty bill if you don’t have collision coverage. You especially want collision coverage if you can’t afford to repair or replace your vehicle out of pocket if it’s damaged in an accident.
If you’re thinking of shopping to find a better price to cover your vehicle, be sure to compare a few companies to find one that matches your insurance needs. Check out which insurers other policyholders rank as the best car insurance companies.
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