Top Collision Auto Insurance Coverage: What You Need to Know

Car insurance comes in all shapes and sizes, and finding the best policy to meet your auto insurance needs can be difficult. Collision insurance is one coverage that is not automatically included in a liability policy, but you may benefit from purchasing collision coverage as a part of your auto insurance plan.

Collision coverage helps pay for repairs to your vehicle if you’re in an accident that causes damage. A liability-only policy will not help to pay for repairs to your car. If you’re in an accident and it’s your fault, you will have to pay for repairs out of pocket without collision insurance.

Collision coverage is not mandatory in any state, but having collision insurance could help you save hundreds or even thousands of dollars if you’re in an accident. Still, you may not need collision insurance if your car is several years old.

To determine whether you need collision insurance, you can find and compare quotes for coverage from several insurance companies in your area. Learn more about each company’s deductible for collision insurance and see how much you’d pay in monthly or annual rates to add collision to your auto insurance policy.

What is collision auto insurance?

Auto collision insurance is a type of car insurance that helps cover necessary repairs to your vehicle after an accident. If you’re in an accident and it’s your fault, collision coverage will help pay to repair your vehicle. Without collision coverage, you would have to pay to fix your car out of pocket.

Most insurance companies do not sell collision insurance on their own. Instead, you can purchase collision coverage as part of a full coverage policy that also includes liability and comprehensive car insurance.

In addition to a car accident, collision insurance covers certain incidents that do not involve two or more cars. For example, a collision insurance policy will cover you if you’re driving and hit a patch of ice that sends you into an inanimate object. Collision coverage also covers damage caused by a pothole in the road. 

Collision insurance reimburses you for what you pay for repairs to your vehicle after an accident, but you need to consider the deductible of any plan you’re considering. If the deductible is higher, you will probably have lower rates. On the other hand, if you choose a lower deductible, you can expect to pay more in monthly or annual installments. 

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What does collision insurance cover?

With collision insurance, you’re covered for several incidents. Some of the most common situations that necessitate a collision insurance claim include an accident or collision with:

• One or more moving or parked vehicles
• Telephone pole(s)
• Guardrails
• Fence(s)
• Sign(s)
• Tree(s) or shrub(s)
• Home or another building

Some collision policies will cover repairs to your vehicle if you flip your car, if someone hits your car and then flees the scene, or if you hit a pothole or other obstruction in the road. 

Before you purchase a collision insurance policy, shop online to compare rates for coverage. You may find that rates vary significantly from one auto insurance company to the next. Comparing quotes will help you avoid paying too much for coverage.

Considering collision insurance, you’ll also need to determine whether your car has depreciated enough in value that a collision policy would not be helpful.

Read more: Will Auto Insurance rates increase after an accident?

What does collision insurance not cover?

Collision insurance can help in several situations, but many require additional auto insurance coverage. Some of the things collision insurance does not cover include the following:

• Damage to someone else’s vehicle or property. Collision insurance will help pay for repairs to your vehicle if you’re at fault in an accident. Still, you’ll need liability insurance to pay for damage you cause to someone else’s car, home, fence, or other property.
• Injuries to a pedestrian or animal. If you cause an accident that hurts a person or animal, your liability coverage will help cover the cost. If medical attention costs exceed your liability coverage limits, you may pay out of pocket.
• Damage from natural disasters, theft, or vandalism. Comprehensive insurance pays to repair your vehicle if it’s damaged by something other than a collision. Comprehensive coverage pays for damage from inclement weather, falling debris, and other situations.

You cannot purchase collision insurance on its own. Instead, you’ll need to purchase liability auto insurance to drive legally in your state. Most companies will sell collision and comprehensive coverage as a full coverage policy.

You will be covered for most scenarios if you have liability, collision, and comprehensive insurance. Still, you may want to consider additional coverage options, like roadside assistance, gap insurance, and new car replacement, depending on the age of your vehicle and how often you drive (read our “Understanding New Car Replacement Insurance Coverage” for more information).

If you want to add any of these options, we can help you determine which auto insurance companies have the best roadside assistance programs and which auto insurance companies offer gap insurance.

How does a collision auto insurance deductible work?

Collision auto insurance policies often have a predetermined deductible that can be anywhere from $250 to $2,000. 

If you caused a car accident and need to file a claim for repairs, you should consider how much those repairs will cost. For example, if the damage that the accident caused will cost around $500 to repair, but your deductible is $1,000, you should pay out of pocket for repairs to save money.

Additionally, even if the cost of repairs is higher than your deductible, consider the potential rate increase when determining whether you want to file a claim. For example, you should file a claim if the damage costs hundreds more than your deductible.  However, if the damage is around $150 more than your deductible, it might be better to pay for repairs, so your insurance rates don’t increase. 

If the repairs to your vehicle will cost more than your vehicle’s actual cash value, your insurance company will declare your car a total loss. If this happens, you will receive a payment in the amount of your vehicle’s ACV to purchase a different car. 

Read more:

• Understanding Actual Cash Value vs Replacement Cost for a Car
• What is total loss Auto Insurance coverage?

Consider your vehicle’s ACV to determine whether you need collision coverage as part of your auto insurance policy. You can raise or lower your collision insurance deductible to increase or decrease your rates. A higher deductible means lower monthly insurance rates, while a lower deductible means higher monthly coverage rates.

You can choose a higher collision deductible to keep the cost of auto insurance down. Still, remember that you should always be able to pay your deductible if you are ever in an accident and your vehicle needs repairs.

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Are collision and comprehensive insurance the same?

Collision and comprehensive auto insurance are not the same. Collision insurance helps pay for repairs to your car if you cause an accident. Without collision coverage, you would pay for repairs to your vehicle out of pocket.

Comprehensive auto insurance helps pay for repairs to your vehicle if wind, hail, inclement weather, falling debris, or wild animals cause damage. Comprehensive insurance typically costs around $14 per month and collision insurance costs around $24 per month. (For more information, read our “Will auto insurance pay for road debris damage?“).

Collison and comprehensive are often paired together as part of a full coverage policy. Most insurance companies offer full coverage policies that include the necessary levels of liability in your state, collision, and comprehensive insurance. 

Who should get auto collision insurance?

Before you buy a full coverage policy, you need to do the math to determine if your car carries enough value. Full coverage makes sense for you if you have a relatively new car or a loan or lease on your vehicle. However, if your vehicle is older and is only worth a few thousand dollars or less, you may want to use a liability-only insurance policy.

Additionally, people who own new cars should consider coverage like GAP insurance and new car replacement so they don’t have to pay out of pocket if their vehicle is totaled, but they owe more on the loan or lease than the car was worth. (For more information, read our “Understanding Gap Insurance: What is it and how does it work?

How much does collision auto insurance cost?

Collision car insurance costs around $290 annually or $24 each month. This may sound like a lot, but you must consider how you will benefit from the coverage if you ever cause a car accident. 

You may find cheaper rates with certain insurance companies in your area. However, you’ll need to shop online and get quotes from several companies to compare the cost and see which company offers the coverage you need at a price that works with your budget.

Remember that certain things impact your overall car insurance rates, like:

• Age
• Gender
• Marital status
• Car make and model
• Driving history
• Credit score

If you have a clean driving record, good credit, and are over 25, you can expect lower-than-average rates for collision coverage.

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How does a collision deductible impact rates?

If you choose a $1,000 deductible for your vehicle, you could save $20 to $50 per month in premium. Still, you must be able to pay your deductible if your vehicle is damaged in an at-fault accident and needs repairs. 

How can I get cheaper collision coverage?

Collision coverage costs more if you have an expensive vehicle. Additionally, you’ll pay more if you have accidents on your driving record or a bad credit score.

To get cheap auto insurance, improve your credit and keep your driving record clean. Over time, a clean driving record should result in lower auto insurance rates. You should also shop online and compare quotes from several companies before choosing a full coverage policy with collision insurance.

Comparing quotes will help you avoid paying too much for your insurance while also allowing you to get the coverage you need.

Is collision auto insurance coverage worth it?

Collision insurance is worth it if you have a relatively new or expensive vehicle. If you have a lease or loan on your car, you may be required to carry a full coverage policy as part of your auto insurance plan.

Collision insurance is not worth it if your car is old and its actual cash value (ACV) is low enough that the coverage would not be beneficial. Consider the cost of collision coverage and your car’s ACV to determine whether the rates and auto insurance deductibles associated with collision coverage are too expensive to help.

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Case Studies: Top Collision Auto Insurance Coverage

Case Study 1: Rear-End Collision

Sarah was in a rear-end collision while driving home from work, resulting in a broken taillight and a dented bumper. Luckily, her collision insurance coverage enabled her to file a claim, and she only had to pay the deductible. Without the insurance, she would have had to cover the entire repair expenses herself.

Case Study 2: T-Bone Accident

John’s car was hit by another vehicle that ran a red light, resulting in severe damage to the side. With his collision insurance, John promptly filed a claim, and his insurance company deemed his car a total loss. Following the terms of his coverage, John received reimbursement for the actual cash value of his vehicle, allowing him to buy a new car without major financial strain.

Case Study 3: Single-Vehicle Collision

In icy conditions, Emily’s car collided with a roadside barrier, causing significant damage to the front end. Thankfully, her collision insurance coverage proved invaluable as she reached out to her insurance provider. They covered the repair costs, with Emily paying her deductible. Without insurance, she would have been fully responsible for the vehicle repair expenses.

Collision Auto Insurance: The Bottom Line

Collision auto insurance could be a good investment if you have a relatively new vehicle, an expensive vehicle, or a loan or lease on your car.

To find the right collision insurance, shop online and compare quotes to see how much different insurance companies will charge. Comparing quotes is a good way to avoid paying too much for collision insurance.

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