What Does Collision Insurance Cover?

What does collision insurance cover? Read on to find out.

Car accidents can be quite heavy on the pocket. This is the reason why you will need collision insurance to assist you in covering any damage caused by another vehicle or article. For instance, in case your vehicle swerves and hits a tree during a storm, then having collision insurance can help pay for your repairs. Without it, you’ll need to pay cash from your own pocket. Collision insurance sounds pretty direct, however, it will not cover all your bills after an accident. Collision inclusion pays to fix your own vehicle’s harm when you hit another vehicle or an object such as a light post or fence. It might likewise pay if another driver hits your vehicle and needs more insurance to pay for the damage caused.

Collision insurance is not a necessary requirement in any state. However, lenders usually require it if you finance or rent a car. If you want to know more about what does collision insurance cover, then you have come to the right place. We have gathered all relevant information to help you understand everything that you need to know. So, what are you waiting for? Without much further ado, let us dive right in!

What is collision insurance?

Collision insurance is auto inclusion that repays the insured individual for any harm that is caused to their own vehicle, because of the fault of the insured driver. This kind of insurance is frequently added as an addition to an essential auto approach to protect drivers in case of harm from an accident. It is a sort of auto insurance that can cover you in case of an accident or mishap with another car or item if your vehicle needs to be fixed.

In contrast to liability insurance, your collision insurance strategy kicks in regardless of whether you are found at fault or not. While this collision insurance definition may sound basic enough, know collision insurance can apply to a broad scope of accident types. Furthermore, collision insurance can conceivably apply to the accompanying situations:

  • An accident including just your vehicle, for example, toppling over
  • An accident with another item, for example, a telephone post or sidewalk
  • An accident with another vehicle, for example, a car accident or somebody hitting your vehicle while it’s parked on the side of the street

Know that collision insurance just repays you for harm to your vehicle – not for harm to different vehicles or objects, or for real wounds that you might get in the mishap.

How does collision insurance work?

As the name infers, collision insurance compensates the protected individual for any harm caused to his/her vehicle from an actual collision. It does not cover damages caused because of robbery or vandalism. Likewise, it also doesn’t cover harm that is paid from another driver’s insurance policy, if the other driver was at fault. Collision inclusion is vital for securing your vehicle against the monetary misfortune that accompanies actual harm to your vehicle. At the point when a mishap occurs, somebody is consistently at fault, and that could even be you. So, it is always a wise decision to ensure that you are covered in case of a mishap.

For the most part, collision insurance is dependent upon a deductible which is a set sum deducted from any collision claims check. You can pick your deductible sum, which commonly ranges from $500 to $1,500. For instance, say you swerved to try not to hit a deer on the street but instead you end up hitting a lamppost, and you have a collision deductible of $1,000. Your insurance organization would pay for the expense to fix the harm caused to your vehicle, minus $1,000.

On the off chance that the expense of the harm was not exactly your $1,000 deductible, you wouldn’t have any desire to make a claim in light of the fact that your safety net provider wouldn’t pay — and would almost certainly expand your rates later for having a claim. In the event that the vehicle was annihilated by the collision, your safety net provider would deduct $1,000 from your vehicle’s estimated value before the crash and send you an installment for that sum. This deductible would likewise apply if your vehicle was as yet drivable, yet the harm would cost more to fix than the worth of your vehicle, and the insurer pronounces it to be totaled. You could in any case fix your vehicle, however, it would be recorded as salvaged on the title. A few safety net providers will not cover salvaged vehicles or will charge more in the event that they do.

Do you really need collision coverage?

You might think of yourself as a very responsible driver and therefore question as to whether you really even need collision insurance or not. While collision insurance is not mandatory according to state law, it’s consistently a wise alternative. With multiple elements on the road that are out of your control, would you truly like to take a chance paying a large number of dollars from your own pocket for harm caused to your vehicle after a mishap? Collision inclusion assists you with securing your investment, particularly when combined with liability and comprehensive inclusions. On the off chance that you are renting your vehicle or making installments (rather than completely owning your vehicle), your finance organization may necessitate that you buy both collision inclusion and comprehensive inclusions. Check with your auto loan specialist about whether collision inclusion is required. Collision inclusion is particularly significant for new drivers, like teenagers, who have less insight into what can happen on the road.

What does collision insurance cover?

Collision insurance covers harm to your own vehicle from:

  • An accident you cause with another driver.
  • A collision with an object like a tree or post box.
  • Your vehicle turning over.
  • Another driver hitting your vehicle in the event that they don’t have any or enough insurance to take care of damage expenses, and you don’t have uninsured/underinsured driver property harm inclusion.

In case you’re in an accident and another driver is totally at fault, their property damage liability insurance pays for harm to your vehicle. In case that they have it, you’d make a claim to their insurance first. This inclusion is mandatory in each state aside from New Hampshire, which doesn’t need accident protection.

In any case, in numerous states, minimum cutoff points are low — just $5,000 or $10,000. A driver with just state-required property harm limits wouldn’t have sufficient inclusion to pay for a more up-to-date vehicle whenever totaled. At that point, your collision insurance would kick in. This is one explanation of why banks require collision and comprehensive inclusion insofar as you’re renting or paying off a vehicle. You could be drowning in an auto loan, on the hook for a large number of loaned dollars if your vehicle was totaled soon after you bought it.

What does collision insurance not cover?

Collision insurance does not cover:

  • Medical bills (yours or another person’s)
  • The harm caused to your car that is not related to driving (examples: hail or robbery)
  • Damage caused to another person’s car

The cost of collision insurance

The average yearly expense of collision inclusion in the U.S. was about $363 in 2017, the latest year for which data is accessible, as per the National Association of Insurance Commissioners. Your own expense might be higher, as this figure incorporates limits and may represent group policies that are regularly less expensive than an individual arrangement you could purchase on the web.

Contingent upon the organization, you probably won’t have the option to purchase collision insurance without exhaustive inclusion, or the other way around. This could be on the grounds that you have a functioning credit or rent that requires both, or on the grounds that your guarantor expects one to buy the other. Collision insurance will in general cost significantly more than comprehensive insurance since collision claims are more common. Picking higher deductibles can bring down your premium, as long as you can cover the cash-based expenses. The expense of your collision insurance can fluctuate contingent upon your:

  • Vehicle’s worth
  • Vehicle’s year and type
  • Deductible sum

Typically, the lower your deductible, the higher your premium. Thus, on the off chance that you intend to purchase car collision inclusion, choosing a higher deductible, by and large, helps in bringing down the expense of your accident protection. Additionally, you should initially have complete insurance inclusion for your vehicle before you can purchase collision insurance.

Comprehensive vs. collision insurance

The fundamental contrast between collision and comprehensive inclusion boils down to the topic of what the driver controls. Collision insurance will provide coverage for occasions that a driver can control or when another vehicle crashes into your vehicle. Comprehensive inclusion for the most part falls under “acts of God or nature,” or things that are commonly out of your control when driving. These can include occasions like a scared deer, a heavy hailstorm, or a carjacking.

How about we utilize the aftermath of a significant tempest to illustrate the contrasts between collision and comprehensive. In that tempest, we should think about two speculative occasions: First, a substantial lamppost was blown down and fell on your truck, or second, you swerved to stay away from a falling tree and ended up colliding with a guardrail. On the first occasion, you were unable to control when or why a tree fell on your vehicle. This sort of mishap would get repaid under your comprehensive arrangement. In the subsequent situation, you were driving the vehicle and ultimately turned into the guardrail. This makes it a collision, and collision insurance pays for the harm.

Collision coverage deductibles and limits

Collision inclusion has a deductible, which is the sum you pay before your inclusion helps pay for your case. You can ordinarily pick the measure of your collision deductible when you purchase inclusion. Contingent upon your insurance plan, you may have a few deductible amounts to browse from. These amounts are usually $0, $500, or $1,000. In the event that you pick a lower deductible, your premium will probably increment. Similarly, If you pick a higher deductible, your premium may diminish. Remember, nonetheless, you should pay your deductible from your own pocket toward vehicle repairs as a component of a covered case. Along these lines, on the off chance that you pick a $1,000 deductible and your vehicle is later harmed in a covered mishap, you’d need to pay $1,000 toward repair costs. Basic deductibles for the most part range from $250 to $1,000. Be that as it may, the worth of your vehicle is a significant factor to remember while deciding your deductible sum.

Collision inclusion also has a limit, which is the greatest sum your arrangement will pay toward a covered case. Your collision inclusion limit is regularly the actual cash value of your vehicle. For instance, say your vehicle is totaled in a covered collision. Your insurance plan would write you a check for the vehicle’s depreciated value, excluding your deductible. Remember that “depreciated value” signifies that you will most likely be unable to supplant your old vehicle with one of a more current make and model. You’d probably need to utilize your very own portion of cash to do that.

When should you drop collision coverage on your car?

The standard dependable guideline used to be that vehicle proprietors should drop collision and comprehensive insurance when the vehicle was five or six years of age, or when the mileage arrived at the 100,000 mark. However, presently it relies upon the worth of the vehicle and its new parts. A costly vehicle, similar to a Mercedes, might merit the expense of collision and comprehensive inclusion for a few a greater number of years than a Nissan Sentra. Furthermore, new parts may be so costly as to effectively surpass the deductible.

Older vehicles that are still drivable, yet have lost a lot of their worth through depreciation, have their own calculus. While guaranteeing these vehicles, it bodes well to drop either of these inclusions. This is on the grounds that your greatest payout — which is the worth of the vehicle excluding your deductible sum — will probably be pretty low and not worth the insurance cost over the long run. Classic and vintage vehicle proprietors have extraordinary considerations to make. Proprietors of these vehicles normally have classic vehicle insurance. These approaches depend on the vehicle’s agreed value rather than depreciation. Also, that could be founded either on the vehicle’s condition or on the cost of the special-order parts important to fix it.

Therefore, given the expense of collision and comprehensive inclusion, and the potential payouts, does it bode well eventually to keep one inclusion and drop the other, and would you be able? The appropriate response is yes to both the queries. While safety net providers for the most part sell them together, and drivers of older vehicles regularly drop them simultaneously, comprehensive insurance is a preferable incentive for the cash as compared to collision inclusion.


Now that you have read this article, you know all about what does collision insurance cover. Collision insurance is the inclusion that assists to pay for fixing costs or supplant your vehicle if it’s damaged in a mishap with another vehicle or object such as a fence or a tree. In case you’re renting or financing your vehicle, collision inclusion is regularly needed by the bank. On the off chance that your vehicle is paid off, collision is a discretionary inclusion on your vehicle insurance strategy. Collision insurance provides coverage from a collision with another vehicle, a collision with an object like a lamppost or tree, etc, and/or a single auto crash that includes toppling or falling over.

Tony Bennett

Tony Bennett

Tony Benett makes his living in the insurance industry by teaching and consulting. He is also recognized by the legal profession as an expert on insurance coverages. His insurance experience includes having worked at the company level, owned an independent general agency and having worked for an insurance association. He has received various certificates over the past few years and helps his clients and readers by giving them a realistic outlook on what they can expect to achieve within their set targets. At Insurance Noon, he is known for his in-depth analysis and attention to details with accuracy. He has been published as one of the most referred agents by his peers in the insurance community. Tony loves the outdoors and most sport events. His passion other than providing excellent advice is playing golf.

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