Collision insurance is one of the first protection plans you’ll need if you want full coverage car insurance. But do you know how it works? Read on to find out.
We at Way.com have put together a comprehensive guide about collision insurance for you. You’ll find an exhaustive list of affordable collision insurance providers, as well as tips on how to find the best car insurance for your needs. Furthermore, we’ll take a look at when you might need collision insurance coverage. These include limits that are appropriate for your car.
What is collision insurance?
Collision coverage is an optional protection plan that insurance companies offer for an extra charge. It pays for the damage to your vehicle sustained in a covered accident. Although you do not require collision insurance by law, car lenders frequently request it. It pays up to the vehicle’s actual cash value (ACV). A collision protection package always includes a deductible.
What does collision insurance cover?
Collision insurance on a car insurance policy covers damage to your car caused by a collision with another vehicle, an object, or an accident in which your vehicle rolls over. It makes no difference who was at fault for the processing of claims. However, it does not cover collisions with animals, unlike full coverage car insurance. However, if you collide with a tree or a fence, your insurance company will cover the costs of the damage.
What does it not cover?
Although collision insurance often covers damage to your vehicle due to an accident, it is not always applicable. Collision insurance usually excludes:
- Theft and vandalism
- Damage caused by fire, hail, flooding, and wind.
- Your car damaged by a falling object
- Damage you cause to another person’s car in an accident due to a collision with an animal
When buying auto insurance, talk to your agent about comprehensive or full coverage car insurance policies to prevent paying out of your pocket in these scenarios.
How long do collision claims stay on your insurance?
How does collision coverage differ from comprehensive insurance?
Collision insurance typically covers accidents where the insured vehicle collides with something like a tree, railing, or another vehicle, causing damage to the covered vehicle.
Comprehensive coverage usually covers passive incidents such as extreme weather, a collision with an animal, vandalism, or theft that cause damage to the insured vehicle.
Is it mandatory?
In many states, basic car insurance coverage consists of property damage liability insurance, bodily injury liability insurance, and uninsured or underinsured motorist coverage. Some states may require drivers to carry personal injury protection coverage. But no state mandates collision insurance as part of a driver’s basic coverage.
However, just because your state doesn’t require collision insurance doesn’t mean you shouldn’t get it as part of your auto insurance. If you are involved in an accident and do not have collision coverage, you will be responsible for all vehicle repairs. While minor body damage may only cost a few hundred dollars, repairs to critical systems such as the engine or suspension could cost thousands of dollars.
Banks and other financial institutions require drivers to have collision insurance. This if your vehicle is damaged or totaled so that they may reclaim the amount owed on your loan. If your vehicle is “totaled” in a collision and you do not have collision insurance, you may be responsible for any remaining loan payments out of pocket.
In general, obtaining collision insurance is a good option because the possible advantages could well surpass the expense.
Do you require one?
Adding collision insurance to your policy will raise your premiums. It will provide you with more protection and lower your financial risk. If you have a leased or financed vehicle, your lender may require you to get collision insurance.
Furthermore, drivers of more expensive cars, or those that retain their worth, typically get collision insurance to avoid paying for major repairs out of pocket. On the other hand, an owner of a substantially depreciated vehicle that would cost more to repair in an accident may not consider collision insurance useful.
Nobody expects to be involved in an accident in which their vehicle is damaged or, worse, totaled. Losing your automobile can be emotionally draining as well as a financial strain that you may not have anticipated. Collision coverage is available to protect drivers financially.
Where can I find the best collision coverage for my car?
All major insurers offer collision coverage as an optional add-on to your car insurance policy. It is one of the basic coverages available, including liability, comprehensive, medical payments, personal injury protection, and uninsured/underinsured motorist coverage.
Our team of analysts sought quotations from five different insurance providers. This is done to get collision coverage. We found that adding collision coverage to your policy could raise your monthly premium by $20 to $270.
We found the most affordable quotes from Progressive and State Farm among the major insurance providers, followed by Allstate. However, your car insurance quotes could vary as they are calculated using several criteria. The best way to find the most affordable car insurance quotes for your needs is to shop around and obtain several quotes online.