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Guide to Collision Car Insurance [2023]

Guide to Collision Car Insurance [2023]

As a car owner, one of the first things you'll need to worry about is acquiring auto insurance, a legal requirement to drive in almost every state in the United States. Of course, the minimum required insurance isn't your only option. There are many extra policies you can add to further protect you in the event of an incident: One of these additional plans is collision car insurance.

What is Collision Car Insurance?

Collision Insurance Definition: Insurance coverage that covers collisions unrelated to an auto accident (except in particular circumstances, like a rollover).

Despite the name, auto collision insurance rarely covers the damage resulting from two automobiles colliding on the road. Instead, collision car insurance is designed to help you when your vehicle collides with a stationary object. Collision insurance is almost always optional, with no state officially requiring it by law in 2022. However, if you have your car on loan (either through a dealership, bank, or other lenders), you may be required to retain collision insurance as part of your agreement. Other than that, collision insurance is additional coverage you can have on top of your required liability or comprehensive insurance.

What Does Collision Insurance Cover?

In a car insurance policy, what collision insurance covers will vary based on what company you go with and the exact wording of your policy. In general, collision insurance on a car will cover the following:

  • Damage occurring from a collision with another vehicle while you are not driving (i.e., someone running into your parked car).
  • If an object or piece of property collides with your car. For example, if a fence or tree falls over and damages your car or a shopping cart hits your vehicle in a parking lot.
  • Damage occurring due to your vehicle rolling or falling over. This is one of the few instances where collision insurance would come in handy during an auto accident.

On the other hand, collision insurance will rarely, if ever, cover the following:

  • Damage due to inclement weather, like hail, snow, or flooding.
  • Any damage you incur (i.e., where you are at fault).
  • All medical bills, whether they be yours, a passenger, or another involved party (like someone in another vehicle).

Does Collision Insurance have a Deductible?

Does Collision Insurance have a Deductible?

For the most part, you can expect collision insurance to have a deductible or the amount you'll need to pay out of pocket before claim benefits kick in. When choosing your policy, you'll need to find a balance between premium and deductible. The benefits range is generally between $0 and $1,000, though it may go higher depending on what type of vehicle you drive.

The lower your deductible, the higher the premium you'll pay each month. Choosing that $1,000 deductible may seem advantageous when you see your small monthly payments. Unfortunately, if you end up making a claim and the damage is under that $1,000 limit, you won't get any money from your insurance company. There is also a limit to what your collision coverage will cover damage-wise, which you'll want to check before you sign any paperwork.

What Does a Collision Insurance Premium Depend On and What Are the Limits of These Policies?

Your collision insurance premium will depend on a variety of factors, including:

  • Where you drive
  • What you drive
  • Your age, marital status, and occupation
  • What other coverage you have
  • How much you use your vehicle
  • Your credit score
  • Your vehicle's history

As for how much the policy covers, that will vary based on who provides your insurance and what level of coverage you pay for. Collision insurance will generally cover the full costs of your vehicle's damage, up to and including the actual value of your car. Premium policies can cover up as much as $50,000 worth of damage to your vehicle, but again, this will change depending on how much your car costs, how much your deductible is, and how much you pay in premiums.

Collision Coverage Frequently Asked Questions

What is Collision in Auto Insurance?

Collision in auto insurance usually refers to collision coverage, which insures your car in the event of non-accident related damage (in most cases). Collision auto insurance is additional coverage meant to reimburse you for damages due to a vehicle colliding with your parked car, a fallen tree, or in some cases, a rollover accident.

How Can I Tell if a Vehicle Has Been in a Collision?

If the accident is recent, you can tell by looking for physical signs of damage. If the vehicle has been repaired, it can be much more difficult. In this case, the best way to see if the car has been in an accident is with a vehicle history report which can provide you with numerous details about any available vehicle. With this information, you can find out if a car has ever been in a recorded collision and get the data you need to confirm any claims made by a seller.

What is the Difference Between Comprehensive & Collision Coverage?

Comprehensive coverage is a type of policy meant to cover damage related to vandalism, theft, fire, or inflicted by an animal. Comprehensive insurance differs from collision coverage, which is intended to reimburse the driver if their vehicle is hit by a car while parked, a tree falls on the vehicle, or any other non-accident-related damage (in most cases).

Is Collision Coverage Worth Getting?

Whether or not collision coverage is worth getting depends on what vehicle you drive, what level of budget you are working with, where you drive, and your personal opinion. If you can afford it, collision insurance is an excellent way to provide your vehicle with extra protection, as well as reduce the financial stress associated with a vehicular incident. If you are leasing a car or have it through some other type of financial plan, you may be required to get collision coverage by the terms of your contract. In this case, collision insurance is definitely worth getting, as neglecting to do so may force you to forfeit ownership of your vehicle.

Do You Want a High or Low Collision Deductible?

Choosing a deductible will depend heavily on what type of budget you have allocated for automotive expenses. If you select a plan with a high deductible, you'll be able to make smaller monthly payments toward your overall insurance bill. If you have a plan with a low deductible, you'll pay higher premiums but less out of pocket in the event of an accident. If you can afford larger monthly payments, you'll want to choose a low deductible, as this will save you the most money if you end up needing to use your insurance. Of course, if you don't believe you'll use the insurance but still want it (either for peace of mind or due to a lease agreement), a higher deductible can be an excellent way to save money each month.

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