Collision Insurance: Protection Against Crash Costs

Collision insurance is a type of auto insurance that covers the cost of repairing or replacing your car after a crash or accident with another vehicle or object. It is an optional coverage, but it may be required by your lender or leasing company if you have a car loan or lease. Collision insurance is separate from comprehensive insurance, which covers damage to your car from non-collision events such as theft, floods or hitting an animal. Collision insurance will cover the cost of repairs or replacement, minus your deductible, even if you are at fault for the accident. It is important to note that collision insurance does not cover damage to another person's car or property, or any bodily injuries sustained in the accident.

Collision insurance covers damage to your car from accidents with inanimate objects

While collision insurance covers a wide range of accidents with inanimate objects, it's important to note that it does not cover damage due to theft, vandalism, or extreme weather conditions. Additionally, collision insurance will not cover medical costs from injuries to yourself or your passengers after a car accident.

Collision insurance is often expensive to purchase, but premiums can be lowered by choosing a higher deductible. This type of insurance is not legally mandated, but it may be required by lenders if you are leasing or financing your car. It is also optional if your car is paid off.

If you are considering collision insurance, it's important to weigh the costs and benefits based on your specific circumstances, such as the age and value of your car, and your ability to pay for potential repairs.

It also covers damage from accidents with other vehicles

Collision insurance covers damage to your vehicle if it collides with another vehicle. This includes single-vehicle accidents, such as hitting a guardrail or telephone pole, and collisions with other vehicles, including hit-and-runs. It also covers damage to your vehicle while it is parked, and collisions with inanimate objects such as a lamppost, curb, tree, or mailbox. Collision insurance is typically available for most types of vehicles, including cars, motorcycles, boats, and RVs.

Collision insurance is not legally required in any state, but your lender may require it if you are leasing or financing your vehicle. It is optional if your car is paid off, but it can provide peace of mind if you cannot afford to pay for repairs or a replacement vehicle out of pocket.

In addition to covering damage from accidents with other vehicles, collision insurance can also cover damage from potholes and sliding into inanimate objects after hitting ice. It is important to note that collision insurance does not cover damage due to theft or vandalism, or accidents caused by another driver's fault, as these would be covered by the other driver's policy. Comprehensive auto insurance covers events outside of a driver's control, such as theft, fire, or vandalism, while collision insurance covers events within a driver's control.

When purchasing collision insurance, you can choose a higher deductible, such as $500, to lower your premium. This means you will pay less for your insurance policy, but you will have to pay more out of pocket if you need to file a claim. Collision coverage can be expensive, but choosing a higher deductible can help reduce the cost of premiums.

It doesn't cover damage to other people's vehicles

Collision insurance is a type of auto insurance that reimburses the driver for damage sustained to their vehicle in the event of a collision. It is often added as an extension of a basic automobile policy.

Collision insurance does not cover damage to other people's vehicles. This is because collision insurance only covers damage to the policyholder's vehicle, and only when they are not at fault. If the policyholder is at fault, then the damage will be covered by their liability insurance, or the other driver's insurance.

If you are in a collision and are found to be at fault, your liability insurance will cover the damage to the other person's vehicle. However, in many states, liability insurance minimums are low, and may not cover the full cost of repairing or replacing a newer vehicle. In this case, the policyholder's collision insurance would kick in to cover the remaining costs.

Collision insurance is important for protecting your vehicle against financial loss due to physical damage. However, it is important to remember that it does not cover damage to other people's vehicles when you are at fault, and this will be covered by your liability insurance.

It doesn't cover damage from accidents with pedestrians or animals

Collision insurance is auto coverage that reimburses the insured for damage sustained to their vehicle in the event of a collision. It is often added as an extension of a basic automobile policy to protect drivers in the event of damage from a collision. It covers damage from a collision with another vehicle, tree, pole, guardrail, and most other possible roadway hazards. It also covers damage from potholes and accidents involving an inanimate object.

However, collision insurance does not cover damage from accidents with pedestrians or animals. If you are involved in an accident with a pedestrian, your auto insurance policy might help, but it depends on your insurance type and policy limits. In most states, the bodily injury liability portion of your insurance will cover medical bills and related expenses if you are at fault. In other states, injured pedestrians might be covered through the driver's auto insurance or their own Personal Injury Protection coverage.

If you are involved in an accident with an animal, comprehensive coverage, which is part of full coverage, will cover the damage. Comprehensive coverage covers damage to your car caused by something other than a collision, such as fire, theft, vandalism, windstorm, flood, falling objects, etc. Hitting an animal on the road is considered comprehensive coverage. If you swerve to avoid hitting an animal and damage your car by driving into a ditch or a pole, you may file a claim under collision coverage.

It's optional but often required by lenders

Collision insurance is an optional coverage that reimburses the insured for damage sustained to their vehicle in a collision. While it is not required by law, it is often required by lenders if you are financing or leasing your car. This is because lenders want to protect their financial investment in the event that your car is damaged or deemed a total loss in an accident.

If you are in the process of financing or leasing a car, your lender will likely require you to have collision insurance. This is to protect their investment in case of any accidents. Collision coverage can help you avoid the costly scenario of having to pay for repairs or a new car while still owing money on your current vehicle. Once your vehicle is paid off, you may choose to drop the collision coverage if it is no longer required or cost-effective.

Even if you are not required to have collision insurance, it can still be a worthwhile investment. For example, if you are unable to cover the cost of repairs after an accident, but can afford the premiums for collision insurance, it could provide you with peace of mind. Additionally, if you have an expensive car or one that is costly to repair, collision coverage can shield you from a significant portion of accident-related expenses, assuming these are higher than your policy deductible.

The cost of collision insurance varies depending on factors such as your driving history and the type of car you have. According to the Insurance Information Institute, the average cost of collision insurance is $290 per year. However, it is important to consider the deductible, which can range from $250 to $1,000, when factoring in the potential costs.

In summary, while collision insurance is optional, it is often required by lenders for financed or leased vehicles. It can also provide valuable protection and peace of mind for drivers, especially those with expensive or newer cars. The cost of collision insurance depends on various factors, and it is important to shop around to find the best coverage for your needs.

Frequently asked questions