Auto Insurance: What's Cool And What's Not

Collision insurance is an optional type of auto insurance that covers the cost of repairing or replacing your car after a crash. It is typically optional, but it may be required in some circumstances, such as when you have a car loan or lease. Collision insurance covers a wide range of accidents, including collisions with other vehicles, objects, and potholes, as well as hit-and-runs and rollovers. It provides peace of mind and reduces out-of-pocket expenses in the event of an accident, but it's important to note that it doesn't cover medical expenses or damages to another person's vehicle. The cost of collision insurance varies depending on factors such as driving history and the value of the car.

Collision insurance covers accidents involving another vehicle or a stationary object

Collision insurance is a type of auto insurance coverage that pays for the cost of repairing or replacing your vehicle if it is damaged in an accident, regardless of who is at fault. This includes accidents involving another vehicle or a stationary object, such as a guardrail, tree, fence, or telephone pole. Collision insurance is typically considered optional coverage and is not legally required in any state. However, it may be required by your lender if you are leasing or financing your vehicle.

Collision insurance provides financial protection in the event of an accident, covering the cost of repairs or replacement. This can be especially important for newer, more expensive vehicles or older vehicles that still maintain good value. By having collision insurance, you can avoid paying out-of-pocket for repairs above the cost of your deductible. It is worth noting that collision insurance does not cover damage to another person's car or injuries caused to another driver or their passengers.

When deciding on collision insurance, it is important to consider the value of your vehicle and your ability to pay for repairs or a replacement vehicle out of pocket. Collision insurance can provide peace of mind, especially for those who may not be able to afford unexpected expenses easily. Additionally, if you are leasing or financing your vehicle, your lender may require you to have collision insurance to protect their investment.

In summary, collision insurance covers accidents involving another vehicle or a stationary object, providing financial protection and peace of mind for vehicle owners. It is an optional coverage that can be added to a basic automobile policy, offering valuable protection in the event of a collision.

It also covers damage from potholes and accidents involving an inanimate object

Collision insurance is an optional coverage that pays to replace or repair your car after a car accident. It typically covers accidents involving another vehicle or an inanimate object. It also covers damage from potholes.

Accidents Involving Inanimate Objects

Accidents involving inanimate objects can be financially damaging. In addition to physical injuries, car accidents can cause serious economic losses if you and your vehicle are not covered by a suitable insurance policy. Collision insurance policies generally cover accidents with inanimate objects. However, it is important to review your policy or consult your service provider to understand the extent of your coverage.

Pothole Damage

Pothole damage is typically covered by collision insurance. Potholes can cause damage to tires, wheels, steering, suspension, and alignment systems. While potholes usually cause minor damage, it is important to document the incident by taking photos, noting the location, time of day, and weather conditions, as well as reporting the incident to the non-emergency police line. Collision insurance will cover the costs of repairing your car, minus your deductible. However, it is important to consider whether the repair costs exceed your deductible, as it may not be practical to file a claim for minor damage.

It does not cover damage due to theft or vandalism

Comprehensive car insurance covers theft and vandalism, but this is optional and not included in collision insurance. Collision insurance covers car accidents, like crashing into another vehicle or a guardrail, but it won't cover theft or vandalism.

Comprehensive insurance covers theft and vandalism, but it is distinct from collision insurance. While collision insurance covers accidents, comprehensive insurance covers non-crash scenarios such as theft, vandalism, fire, hail, and collisions with animals.

Comprehensive insurance can provide financial protection in the event of car theft. If your vehicle is stolen and not recovered, comprehensive coverage may compensate you for the car's actual cash value, minus your deductible. This coverage is optional but highly recommended for peace of mind.

Vandalism, or malicious damage, is typically treated differently from accidental damage by insurers and the police. Vandalism is often classified as an "at-fault" claim, which can result in losing your no-claims discount. It's important to note that comprehensive policies usually don't cover vandalism, and you may need to add it as an additional benefit.

In summary, while collision insurance is crucial for protecting yourself financially in the event of a car accident, comprehensive insurance is equally important for safeguarding against theft, vandalism, and other non-crash incidents.

It's optional unless you have a car loan or lease, in which case it's likely required

Collision insurance is an optional add-on to your basic auto insurance policy. It covers the cost of repairing or replacing your car after a collision with another vehicle or object, such as a tree or guardrail. It also covers damage from potholes, rollovers, and accidents caused by uninsured or underinsured drivers. While collision insurance is generally optional, it is required if you have a car loan or lease. This is because the lender or leasing company wants to protect their financial investment if your car is damaged or totalled in an accident.

If you decide to purchase collision insurance, you will need to choose a deductible amount. The deductible is the amount that will be deducted from your insurance payout when you make a claim. For example, if you have a $500 deductible and your car repair costs $3,000, you will receive an insurance payout of $2,500. Common deductible amounts include $250, $500, $1,000, and higher. Choosing a higher deductible can lower your insurance premium, but it means you will pay more out of pocket if you need to make a claim.

In addition to collision insurance, you may also want to consider comprehensive insurance. While collision insurance covers damage to your car from collisions, comprehensive insurance covers non-collision events such as theft, vandalism, fire, and natural disasters. Comprehensive insurance is also typically optional, but it may be required if you have a car loan or lease. By purchasing both collision and comprehensive insurance, you can ensure that you are covered for a wide range of incidents that could damage or total your vehicle.

When deciding whether to purchase collision insurance, you should consider the value of your car, the likelihood of getting into an accident, and your current savings. If your car is valuable, you drive in high-traffic areas, or you don't have enough savings to cover the cost of repairs or replacement, then collision insurance is a wise investment. Even if it's not required in your situation, collision insurance can provide peace of mind and financial protection in the event of an accident.

The average cost of collision insurance is $381 or $814 per year

Collision insurance is an optional coverage that reimburses the insured for damage sustained to their vehicle in a collision. It is important to note that collision insurance does not cover damage due to theft, vandalism, or another driver's policy if they are at fault. It also does not cover medical expenses or damage to another person's property.

The average cost of collision insurance varies depending on various factors, including the type of car, the cost of repairs, and personal details such as age, gender, and driving record. According to the National Association of Insurance Commissioners (NAIC), the average annual cost of collision insurance in the US was $381 .43 in 2019. However, premiums differed significantly by state, with South Dakota having the lowest average premium of $248.09 and Washington, D.C., the highest at $539.48.

The cost of collision insurance can be influenced by the chosen deductible. Selecting a higher deductible, such as $500, can help lower premiums. Additionally, collision insurance is often purchased as part of a full-coverage policy, which includes liability and comprehensive insurance. It is worth noting that collision insurance is not legally required, but lenders may mandate it for leased or financed vehicles.

When deciding whether to purchase collision insurance, it is essential to weigh the benefits against the drawbacks. Collision insurance can provide valuable financial protection in the event of a collision, but it will increase insurance premiums. It is also important to consider the age and value of the vehicle, as collision insurance may not be worth the cost for older or less valuable cars.

Frequently asked questions