When you think of auto insurance, the thought of getting into an accident might be one of the first things that crosses your mind. If you don’t have collision insurance, even if you have other types of auto insurance, your car will not be financially protected if it is involved in an accident. Almost all states require drivers to carry auto insurance. Read on to learn about the cost of car collision insurance, what it is, and what it covers.
Overview
For people who own their own cars, collision insurance is a choice; you don’t have to get it if you don’t want to. Most likely, you will need to buy collision coverage if you have a car loan or lease. The reason for this is that your lender or lease company wants to protect their money if you total your car in an accident.
As long as you don’t have to buy accident insurance, it’s still a good idea. The most current data from the NAIC shows that the average national collision claim was $4,601. This means if you didn’t have collision insurance and caused an accident, you wouldn’t be able to pay for repair costs. In the event that your car becomes a total loss, you will need to pay for a new one.
What is collision insurance?
Collision insurance is a subcategory of auto insurance that provides financial compensation to the policyholder in the event that they cause damage to their own vehicle as a direct result of their own carelessness. Suppose a driver wants to protect themselves in case an accident causes damage to their vehicle. In that case, they can protect themselves financially by purchasing this type of insurance in addition to their main policy.
How does collision insurance work?
Exactly as its name suggests, collision insurance pays for damage caused by a real accident. It does not pay for damage that was caused by the police or thieves. Additionally, if another driver was at fault for the collision, it does not pay for the damages covered by that driver’s insurance policy.
When it comes to safeguarding your car against the financial loss that comes with physical damage, collision coverage is vital. This is because it protects your car against physical damage. Someone is always to blame whenever an accident takes place, and it could very well be you.
What does collision insurance cover?
Regardless of who was at fault for the accident, collision insurance covers repairs or replacements to your vehicle if it is damaged or destroyed. This is not the same as liability coverage. Which compensates for the damages you cause to another person’s vehicle after you are at fault in an accident. The following accidents are among those that collision insurance covers:
- Wrecks involving another vehicle
- Collisions with a tree, fence, or guardrail
- Vehicle flipping
- Damage caused by road hazards such as potholes
What does collision insurance cover? What It Does Not Cover
Collision insurance does not pay for damage caused by animals, the weather, or anything else in the environment that is not caused by a car accident. Your insurance will not pay for any damage done to your car while it is parked either. Some examples of things that collision insurance does not cover include the following:
- Hail, fire, or flood damage
- Damage from natural disasters
- Collisions with a deer or other large animal
- Medical expenses for any accident
- Damage to another person’s property
- Theft or vandalism damage
- Damage from something falling onto the vehicle (tree, boulder, etc.)
Also, you will need either medical payment insurance (also known as MedPay) or a personal injury protection policy (sometimes known as PIP) in order to cover your own personal medical costs.
How Does a Collision Insurance Deductible Work?
Collision insurance typically includes deductibles as a component of the policy. If you were involved in an accident or collision and filed a claim for your collision insurance, the collision deductible for your collision coverage will be removed from the expenses of repairing your car. There are some circumstances in which collision policy deductibles are higher than $1,000, but the typical range for collision coverage deductibles is between $250 and $1,000.
In essence, claims for collision insurance should also not be submitted too frequently. Because doing so could have a negative impact on your deductibles for collision coverage. Your collision coverage deductibles are another factor that will be considered in your car’s insurance reimbursement for the damages.
After you have received a reimbursement from your collision insurance equivalent to the value of your car, the deductible that applies to your collision policy will be deducted from that amount. If your collision coverage deductible is lower, then you will be paying a lower portion of the costs associated with repairing the damage to your car.
Best Collision Insurance Car
Getting numerous estimates for car insurance from different companies is the most effective way to discover the right collision insurance policy for your needs. Although pricing should be a primary consideration, you should also make sure that the insurance you choose has solid financials and a history of satisfactorily paying the claims responsibilities of its customers. These features can be found at State Farm as well as Nationwide.
#1. State Farm: The Best Experience for Customers
In our comparison of the best companies offering car insurance, we found that State Farm was among the best. The insurance company is well-known for providing excellent customer service as well as a broad range of coverage options. The app for its usage-based insurance service has received an excellent rating in the App Store: 4.6 out of 5 stars.
According to State Farm, participants in this program save up to 30 percent on their auto insurance premiums. State Farm has locations all throughout the United States and provides the full range of basic auto insurance products. This includes liability, collision, comprehensive medical payments, personal injury protection, and uninsured motorist coverage.
#2. Nationwide: Best Usage-Based Insurance
Nationwide is an excellent alternative for drivers who are seeking a wide array of coverage options. The organization is also well-known for its competitive pricing, and its insurance rates are among the most affordable in the industry. However, affordable premiums and adaptable coverage aren’t the only advantages of going with Nationwide as your insurance provider.
The usage-based SmartRide® program monitors your driving patterns and bestows discounts on you when it detects that you are a safe driver. Nationwide boasts that drivers earn a discount of 15% for signing up with them, and the discount increases up to 40% if they drive safely.
Collision Insurance Cost
The cost of auto collision insurance varies from company to company, as is the case with the vast majority of insurance products. But you can budget anything from $300 to $900 per year for the total cost.Â
Collision Insurance Cost: Factors Affecting Cost
Below are a few things that will likely increase the cost of collision insurance:
- Your driving record
- the sort of vehicle you driveÂ
- inflation
- Location
- And possibly a few other aspects can all play a role in determining the cost of your coverage.
The fact that there is such a wide variety of discounts to choose from also makes it challenging to provide an accurate estimate. Even though it’s possible that you’ll qualify for savings such as student discounts, military discounts, and safe driving bonuses. Always make sure you ask your provider what choices are available to reduce your monthly payment. On the other hand, it is known that the cost of collision insurance is always higher than that of comprehensive insurance. This is due to the increased number of claims filed for collisions.
That being said, keep in mind that there is a deductible associated with collision insurance as well as a limit. That is between $500 and $1,500 for deductibles. Be mindful of submitting a claim if the damage is almost equal to or less than your deductible. You might already be aware that increasing your deductible is a straightforward way to lower your rate, despite the fact that doing so can be risky.
Finally, because every state has its own regulations concerning car insurance, the state in which you reside is also a vital component to consider. Your fully adjustable car insurance deductibles and your customizable auto insurance policy limitations give you complete control over the total amount that you are responsible for paying for car insurance each month.
Do I need collision insurance for an old car?
Whether you drive an old car or a car that you paid for, you may be wondering if dropping a collision could help you save money. What matters most is whether you have enough cash on hand to buy a new car if something were to happen. You might want help from your insurance company to buy a new car, even if you already own the old one.
When is it not a good idea to get car insurance?
Sometimes it’s not worth it to buy collision coverage if your car is old or doesn’t have much value. On the other hand, some drivers aren’t sure if their cars are still worth enough to make crash coverage a good idea.
How much is collision insurance per month?
The national average cost of car insurance is $900 per year or $74 per month.
What are the three types of collisions?
There are three types of collisions, as follows:
- Perfectly elastic collision.
- Inelastic collision.
- perfect inelastic collision.
What are four examples of collisions?
They are two billiard balls, a golf club and a ball, a hammer and a nail head, two railroad cars when being coupled together, or a falling object and a floor.
What is the difference between property damage and a collision?
Your property damage liability insurance covers the cost of repairing any harm you cause to another person’s property. Collision coverage pays to repair your own vehicle less your deductible.
What is the difference between collision and comprehensive?
You might be wondering how comprehensive vs. collision car insurance compares. If you crash your car into something, like another car or your own mailbox, collision insurance will cover the damage. But collisions won’t cover other driver’s hospital costs or repairs. Additionally, it won’t pay for damage to your car resulting from a landslide or tornado.
But comprehensive insurance is another story! When you have comprehensive car insurance, it covers almost any natural or man-made disaster you can think of. Was your gas line chewed through by a squirrel? Got it! Glass that is broken or cracked Got it! You hit a big opossum and damaged your front bumper. Got it! All-around security is what you need. If your car is stolen, damaged in a natural disaster, in a collision with an animal or road debris, or by a person who is not here, it pays to fix or replace it.
Why is collision insurance important?
Collision insurance is an important part of your car insurance contract because it protects your finances if you get into an accident. You should think about adding this security to your policy, even though it costs money. Besides that, collision insurance has a lot of advantages that can save you a lot of money if something happens. Accident coverage, rollover protection, pothole damage, single-car crashes, and security for parked cars are some of the advantages of collision coverage.
Conclusion
When it comes to car insurance, collision coverage is an important part that protects owners financially in case their car gets damaged in an accident. It makes sure that repairs to your car are well covered, no matter what happens, so you can drive with peace of mind. Policyholders can find a good mix between insurance rates and out-of-pocket costs by setting the right deductible amount.
References
TOP BEST INSURANCE FOR NEW DRIVERS 2023
Property Damage Liability Insurance: Protect Yourself from Financial Loss
Liability vs Full Coverage Car Insurance 2023: Which Is Better?
