What Does Collision Insurance Cover?

What is collision coverage?

Collision coverage helps pay for the cost of repairs to your vehicle if it's hit by another vehicle. It may also help with the cost of repairs if you hit another vehicle or object. That means you can use it whether you're at fault or not. Unlike some coverages, you don't select a limit for collision. The most it will pay is based on the actual cash value of your vehicle. You will be responsible for paying your selected deductible.

Let's find the right collision coverage for you.

What kind of accidents does collision cover?

Collision helps cover damages to your vehicle if it:

• Hits another vehicle
• Is hit by another vehicle
• Hits an object like a fence or sign

You can file a collision claim regardless of who is at fault.

What damage is not covered by collision coverage?

Collision only provides coverage for damages to your vehicle. That means it wouldn't pay for damage to another person's vehicle or property. Collision also doesn't cover all damage to your vehicle. Examples of damages not covered are:

• Theft
• Vandalism
• Floods
• Fire
• Hitting an animal

If you'd like to know more about coverage for these kinds of damages, check out the comprehensive coverage page.

You may also want to consider adding rental reimbursement coverage. This will help if you need transportation while your car is being repaired.

Why should you buy collision coverage?

Collision coverage:

• Can be used no matter who's at fault in the collision
• Helps pay for the cost of repairs so you're not stuck paying the entire bill on your own
• May allow you to start repairs for your collision damages while the claim is being investigated

If your vehicle is financed or leased, your lienholder may require you to have collision and comprehensive coverage. This helps to protect their interest in the vehicle.

What is a collision insurance deductible?

A collision deductible is the amount you've agreed to pay before the insurance company starts paying for damages. You can think of it as how much of the financial risk you're willing to take on if you're in an accident. Typically, the more risk you're willing to take (higher deductible), the lower your insurance cost would be. The less risk (lower deductible), the higher your insurance cost would be.

Let's say you're involved in an accident that causes $1,000 in damage to your vehicle and you have a $250 collision deductible. You'll pay the first $250 in damage, normally directly to the body shop, and then your insurance will pay the remaining $750.

Who needs collision coverage?

Vehicle owners who drive cars with values greater than their car insurance premiums should consider purchasing collision coverage. This includes people who:

• Lease or finance their vehicles
• Own newer vehicles
• Own older vehicles that have maintained their value

You may not need collision coverage if you own an older vehicle because you might end up paying more in premiums than your car is actually worth. However, choosing not to purchase collision coverage leaves you financially responsible for repairing or replacing your vehicle in the event of a collision.

How do I choose my collision deductible amount?

When selecting a collision insurance deductible, it's crucial to strike a balance between your current financial capabilities and potential out-of-pocket expenses in the event of an accident. A higher deductible typically translates to lower premiums, but it means you will be responsible for paying more money out-of-pocket to repair or replace your vehicle. Conversely, a lower deductible means higher premiums but reduces the amount you have to pay after a collision. You should also consider the value of your car; if you have an older vehicle and choose a lower deductible in exchange for a higher premium, you could pay more in premiums than your vehicle is worth.

How does collision coverage work?

To better understand how collision coverage works, let's take a look at real-life scenarios in which it can be used.

• Single-Car Accidents: Let's say you accidentally collide with an object like a tree or a lamppost. Collision coverage will cover the damages to your vehicle, ensuring you're not left shouldering the repair expenses alone.
• At-Fault Accidents: Let's say you accidentally rear-end the car in front of you while in stop in go traffic. Collision coverage will cover the damages to your vehicle, less your deductible, even though you are considered at fault for the accident.
• Not-at-Fault Accidents: Imagine your parked vehicle was struck by another driver in a parking lot. Even though they are at fault for this accident, you may choose to utilize your collision coverage for repairs. This option may be particularly useful if your car is not drivable and the other insurance provider is still investigating the claim, or if the at fault driver did not carry the appropriate liability coverage.
• Hit-and-Runs: In the event of a hit-and-run accident where the responsible party flees the scene, collision coverage can still be utilized to cover the damages to your vehicle.
• Rollovers or Flipping: In the event of a rollover accident where your vehicle overturns, collision coverage will cover the damages sustained.