Auto Collision Insurance: What's Covered?

Auto collision insurance coverage is a type of auto insurance that covers the cost of repairing or replacing your vehicle if it is damaged in a collision with another vehicle or object, regardless of who is at fault. This includes accidents involving only your car, such as rolling over, as well as accidents with stationary objects like guardrails or telephone poles, and other vehicles. Collision coverage is typically optional but may be required in certain circumstances, such as when leasing or financing a vehicle. It is worth noting that collision insurance does not cover damage to other vehicles or objects, or bodily injuries sustained in the accident.

What does collision insurance cover?

Collision insurance covers the cost of repairing or replacing your vehicle if it is damaged in an accident, regardless of who is at fault. This includes collisions with another vehicle, with a stationary object, or with a building. It also covers single-vehicle accidents, such as hitting a guardrail, telephone pole, or pothole, as well as collisions that occur while your vehicle is parked.

It's important to note that collision insurance only covers damage to your own vehicle and not to other vehicles or objects involved in the accident. It also does not cover bodily injuries sustained by anyone in your vehicle or another vehicle. Collision insurance is typically considered optional coverage and is not legally required in any state. However, if you lease or finance your vehicle, your lender may require you to have collision insurance to protect their investment.

Additionally, collision insurance may cover hit-and-run accidents, roll-overs, and damage caused by uninsured or underinsured drivers. It is worth noting that collision insurance does not cover damage to your vehicle caused by events outside of your control, such as natural disasters, weather, fire, or theft. These types of incidents would be covered under comprehensive insurance.

The cost of collision insurance can vary depending on factors such as your driving history, the type of vehicle you own, and the deductible you choose. It is generally recommended for newer, more expensive, or leased vehicles to ensure adequate protection in the event of an accident.

What isn't covered by collision insurance?

Collision insurance is an auto coverage policy that reimburses the insured for damage sustained to their vehicle in a collision. This includes collisions with another vehicle or an object such as a guardrail or tree. It is important to note that collision insurance is not legally required in any state, but it can provide valuable protection for your vehicle.

While collision insurance can offer financial protection in the event of a collision, there are certain scenarios that are not covered by this type of insurance. Here are some key examples of what is typically not covered by collision insurance:

• Animal collisions: Damage caused by colliding with animals is not covered under collision insurance. Instead, this type of incident falls under comprehensive coverage.
• Natural disasters: Natural disasters such as earthquakes, floods, hurricanes, tornadoes, and volcanic eruptions are not covered by collision insurance. These events are considered "acts of God or nature" and are typically covered by comprehensive insurance.
• Theft or vandalism: Collision insurance does not cover damage to your vehicle due to theft or vandalism. Comprehensive insurance is designed to protect against these types of losses.
• Falling objects: Damage caused by falling objects, such as trees, branches, ice, or projectiles, is not covered by collision insurance. Comprehensive coverage includes protection against these types of incidents.
• Damage from another driver's policy: If the other driver is at fault in an accident, their liability coverage will typically pay for the damage to your vehicle. Collision insurance is not intended to cover these costs.
• Damage outside of a collision: Collision insurance specifically covers damage sustained in a collision. Any damage to your vehicle caused by events outside of a collision, such as a tree falling on it, is not covered. Comprehensive coverage is designed to protect against these types of non-collision incidents.

It is important to carefully review the terms and conditions of your collision insurance policy to fully understand what is and is not covered. Additionally, comprehensive coverage is often purchased alongside collision insurance to provide more comprehensive protection for your vehicle.

How does collision coverage work?

Collision coverage is a type of auto insurance that covers the cost of repairing or replacing your vehicle if it is damaged in a collision with another vehicle or object, regardless of who is at fault. This includes accidents involving only your car, such as rolling over, as well as accidents with other objects like a guardrail, telephone pole, or a tree. It also covers collisions with other vehicles, whether parked or in motion, and hit-and-run incidents. Collision coverage can also provide protection in the event of a crash with an uninsured or underinsured driver.

If you are in an accident and have collision coverage, you can file a claim to help cover the cost of repairs to your vehicle. The same is true if your vehicle is considered a total loss, meaning the damage is so extensive that it is beyond repair. When filing a claim, you are responsible for paying your deductible, after which your insurance company will cover the remaining cost of repairs up to the market value of your vehicle. For example, if your collision policy has a deductible of $500 and your repairs cost $1,200, you would pay $500 out-of-pocket and your insurer would cover the remaining $700.

It is important to note that collision coverage only applies to damages incurred to the policyholder's vehicle and does not cover damage to another driver's vehicle or property. It also does not cover bodily injury costs for anyone injured in your car or another vehicle. Additionally, collision coverage will not cover damage from accidents involving pedestrians, animals, natural disasters, weather, fire, or theft.

While collision coverage is generally optional, it may be required in certain circumstances, such as when leasing or financing a vehicle. Collision coverage can provide peace of mind and help protect your investment in your vehicle, especially when paired with liability and comprehensive coverages.

When to get/drop collision insurance

Collision insurance is an optional form of coverage that pays to repair or replace your car if you collide with something, such as another car, a guardrail, a pole or a tree. It is generally required if you have a car loan or lease.

When to get collision insurance

• If you have a car loan or lease, collision insurance is likely required. This is to protect the lender or leasing company and their assets.
• If you are driving on dangerous roads, collision insurance can help reduce your risk of financial loss.
• If you are a safe driver, collision insurance can provide peace of mind and protect you financially in the event of an accident.
• If you have an expensive vehicle with costly parts and labour, collision insurance can help cover the cost of repairs.

When to drop collision insurance

• If your vehicle is paid off and its value is low (a few thousand dollars or less), collision insurance may not be worth carrying, especially if you have a high deductible.
• If your car is not being driven and is kept in storage, you may not need collision insurance. However, you may still want to consider comprehensive insurance to protect your vehicle against theft, vandalism, fire and weather-related damage.
• If your vehicle is insured on another policy, such as a family member's existing policy that includes collision coverage, you may not need separate collision insurance.
• If you can afford to replace or repair your vehicle out of pocket, you may not need collision insurance.
• If the cost of collision insurance is more than 10% of your car's present value, it may not be worth the expense.

Collision insurance costs

Location

The cost of collision insurance differs across states and even zip codes. For instance, Wyoming, Vermont, and New Hampshire have cheaper full coverage insurance rates compared to states like Florida, Louisiana, and Texas.

Vehicle Type

The make and model of your vehicle impact insurance rates. Sports cars, luxury vehicles, and electric cars tend to have higher insurance rates due to their higher repair costs and the likelihood of speeding. Additionally, popular car models that are frequently stolen also have higher comprehensive insurance rates.

Driving History

Your driving record plays a significant role in determining collision insurance costs. An at-fault accident, DUI, or speeding ticket on your record will likely increase your insurance rates. These incidents can remain on your record for up to five years, affecting your premiums during that period.

Credit Score

In most states, insurance providers use credit-based insurance scores to calculate rates. Poor credit history or low credit scores can result in higher collision insurance costs, sometimes up to 60% more than those with good credit.

Insurance Provider

Different insurance companies weigh factors like driving history, credit score, and vehicle type differently, resulting in varying collision insurance rates. It is essential to shop around and compare quotes from multiple providers to find the most affordable option for your specific circumstances.

While collision insurance is not legally required, it can provide valuable financial protection in the event of an accident, especially for leased or financed vehicles. The cost of collision insurance is an important consideration when deciding whether to include it in your auto insurance policy.

Frequently asked questions