Collision Insurance

What is Collision Insurance

Chances are, you purchased the liability insurance because it’s mandated by most of the US states to carry one. You are now protected from financial loss due to the injury and damage you have caused to others if ever there is an accident. However, now you should ask yourself: If my car was damaged because of the crash, can I afford to pay for its repair?

Collision insurance may be your best option to answer that question. Consider the following benefits of purchasing this kind of coverage:


• Collision insurance is a coverage that will help you pay to repair and replace your car if it’s damaged in an accident with another vehicle, regardless of who is responsible.
• In the event when someone crashes into your vehicle while on the road or it’s parked on the street, your insurance provider will pay for your damages and then seek reimbursement from the other driver’s insurance.
• It also provides to repair and replace your car if it’s damaged due to collision with objects such as a tree, a fence, road barriers, a phone pole and other purposes.
• It can also cover for a single car accident that involves falling over or rolling.
• If you are using a rental car, it may also include its repair when it’s damaged.

Pay the Deductible Amount

When you purchase collision coverage, you have to pay a deductible amount towards the repair of your car after the accident. This specified amount that you spend out of your pocket for collision coverage may vary. Typically, when you select a lower deductible amount, your premium or the amount you pay for the policy goes up.

Your Coverage Limit

When you have paid your deductible amount, your collision coverage would kick in and help pay for the rest of the repair costs, up to your coverage limit or the maximum payout for your policy. The coverage limit is usually the actual cash value of your car.

Required When the Car is Loaned or Leased

Collision coverage is typically required if you have a car loan from a lender or if you lease your vehicle. However, this coverage is optional when your credit is ultimately paid. However, if you want some peace of mind and you know you can’t afford the high costs of its repair, collision coverage is a smart addition to your auto insurance coverage.

What if your car is beyond repair?

Your insurance provider will give you a check for your car’s depreciated value, minus the amount of your deductible. Note that every year, your car’s value may depreciate as fast as 25% in the first year and 46% in the third year. This means that if you want to replace your old car with a new one, you’ll have to do it by using some of your bucks. Some owners of old vehicles opt out of collision insurance especially upon determining the resale and depreciated value of their car.

Your collision insurance does not provide coverage for:
• damages caused by weather disturbances and collision with animals
• theft, vandalism, riot
• damages to another person’s vehicle
• yours and another person’s medical bills

Ask a consultant if you have questions and get a free quote today!