What is collision car insurance?
What is collision insurance?
Collision insurance is a form of coverage that will protect you in case of an accident where no one is at fault. Collision coverage will also provide additional protection in the case of damage to your vehicle following an at-fault accident.
Collision coverage is an optional add-on you can buy on top of liability car insurance. Collision insurance pays the cost of repairs up to a certain coverage limit—usually the actual cash value of your vehicle—if your car is in a collision of any kind, whether you hit a deer, a guardrail, a pothole, or another car. And you’re covered regardless of fault.
Here’s what makes collision coverage different from minimum liability auto insurance. The only insurance coverage you’re legally required to have—bodily injury and property damage liability coverage—pays for damages and medical bills that you are responsible for.
That means that if you’re at fault in an accident, your policy covers the other driver’s repairs and medical bills, but you’re on the hook for your own—which is where collision coverage comes in.
Collision coverage will cover damage to your vehicle if you’re in an accident and the other driver’s insurance won’t cover you or if you’re at fault. Similarly, if you hit a deer or a street sign and your car is damaged, collision coverage helps. Otherwise, you’ll pay the full repair costs out of pocket.
Speaking of out of pocket: there’s no free lunch in the insurance industry, and collision coverage comes with a collision deductible. When you make a collision claim, you pay that deductible—usually $500 or $1,000—before you get your payout.
If you’ve financed your car, most lenders require you to maintain full-coverage car insurance, which includes collision coverage and comprehensive coverage alongside the normal liability insurance. Got that? Collision coverage is part of full coverage, but it’s one of three types of coverage, and full coverage includes all three.