Collision Insurance is essential for protecting your vehicle against damages resulting from accidents with other vehicles or objects. It ensures that your car can be repaired or replaced under such circumstances. Get a free quote to start safeguarding your car today.
Collision Insurance Keeps You Covered
What is Collision Insurance?
Wondering what is collision auto insurance? Well,Collision insurance is the coverage you purchase on your auto insurance policy to cover the damages to your car caused by a collision with another vehicle or other object. Collision is part of a full-coverage car insurance policy, which provides coverage for the injuries and damage you cause to others with your car under the liability insurance as well as coverage for your vehicle to be repaired or replaced after an accident.
Do I need Collision Insurance?
Collision insurance can be a very valuable safeguard, but whether it is worth it depends on your specific situation. While it is not legally required, lenders typically mandate it if your car is leased or financed. This ensures that your vehicle stays protected until the loan is completely paid off.
For vehicle owners, the key factor is your car’s current value. If your car is newer or still worth a significant amount, collision coverage helps to protect you from large repair or replacement costs after an accident, regardless of who is at fault. This can prevent a financial strain.
However, there are instances when getting collision insurance is just not doable. For instance, if your car is older and has depreciated considerably, you may want to reconsider. The combined cost of premiums and your deductibles can exceed the amount that you would otherwise receive from a claim.
How Collision Insurance Works When the Other Driver is At fault
If you are involved in a car accident that is not your fault, the damages to your vehicle will be covered by the at-fault driver's insurance policy up to the property damage limit on their policy. Unfortunately, if the at-fault driver does not have insurance or does not have enough property damage coverage to fix your car, you will need to notify your car insurance company so that the damage to your car can be paid from the collision coverage portion of your insurance policy. If you do not carry collision coverage on your car, you will have to pay for the damages to your car yourself.
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Read MoreHow Much Will My Insurance Company Pay If My Car Is Totaled?
If you have collision insurance on your car and your car is totaled in an accident that is your fault or with an insured or underinsured driver, your insurance company will determine the actual cash value (ACV) of your car at the time of the accident. The ACV of your car is dependent on its current condition and factors in the depreciation of the car. Typically, if the repair estimate for your car is 80% or more than the ACV of the vehicle, your insurance company will deem the car a total loss, and you will be paid the ACV of your car after your collision deductible is satisfied.
The exception to this is if you have purchased a car insurance policy that provides "agreed value" coverage instead of actual cash value coverage. In this case, there is an agreed value listed on your auto insurance policy for your vehicle and your insurance company will use this figure rather than the actual cash value of your car to determine whether or not your car is totaled. The agreed value of a car is typically much higher than the ACV.
What is the Difference Between Collision and Comprehensive Coverage?
Both collision and comprehensive insurance protect your vehicle, but they apply to different types of damage. Knowing the distinction helps you choose the right level of protection.
Collision Coverage
Covers damage to your car from a collision with another vehicle or object.
Applies regardless of who is at fault.
Includes accidents such as hitting another car, a pole or a guardrail.
Typically required for financed and leased vehicles.
Comprehensive Coverage
Covers damage caused by events other than collisions.
Includes risks such as theft, fire, vandalism, natural disasters, or falling objects.
Covers damage caused by animals (example: hitting a deer).
Often required alongside collisions by lenders.
Does Collision Insurance Cover Other Drivers?
If you have collision coverage on your car insurance policy, your insurance company will pay for the damages to your car when you or any of the other listed drivers on your policy get into an accident. Your insurance company will not cover drivers who are specifically excluded from your insurance policy.
Does Collision Insurance Cover Rental Car Accidents?
Collision insurance may extend to rental cars, but the coverage depends on your specific policy and where you are renting the vehicle. It is important to verify the details with your insurers before relying on them.
The coverage generally applies if the rental is for personal use and not business purposes. It is often valid within your home country and sometimes in nearby regions. You also must carry collision coverage on your own vehicle for it to transfer.
A few limitations to be aware of are:
Coverage may be restricted or excluded in certain countries.
Policies often don’t cover loss of use fees charged by rental companies.
Business rentals or long-term rentals may not be included.
Deductibles from your personal policy still apply.
Why Get Collision Coverage with A-MAX Insurance?
A-MAX Insurance has an easy interface that allows drivers to compare quotes for collision coverage from different carriers. You can easily view quotes tailored to your unique needs from such auto insurance coverage.
Collision Insurance FAQs
Q: What does collision insurance cover?
A: Collision insurance covers the damage to your car when it is involved in an accident with another vehicle or object.
Q: What is a collision deductible?
A: If you carry collision coverage on your car, you will have a collision deductible. This is the amount of money you must pay for the damages to your car before your insurance company will pay for the rest.
Q: Does my collision insurance cover a rental car?
A: If you have collision coverage on your car, typically, the coverage will extend to a car that you rent in the U.S., U.S. provinces, Canada, or Mexico, but it is important to check with your insurance carrier to confirm this before renting a vehicle.
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