What Is Collision Insurance?
Collision insurance is an optional coverage that helps pay the cost of repairing or replacing your car after being damaged in an accident, whether it’s your fault or not. Usually, when you are involved in a covered accident, you’ll pay a collision insurance deductible, which is a set amount of money you will pay out-of-pocket prior to your insurance payment coverage. You choose a collision deductible when electing collision insurance coverage on your policy. Collisions involve anything from hitting another vehicle, to hitting an object, like a tree, guardrail or mailbox.
What Does Collision Insurance Cover?
Basically, collision insurance is a coverage that helps pay to repair or replace your car if it’s damaged in an accident. If you get T-boned, rear-ended or side-swiped, or you do the same to someone else’s vehicle, collision coverage helps protect you financially from the expense of repairs. Or, let’s say you didn’t see that really gigantic tree behind you and you backed right into it. Collision coverage will help pay for the resulting gigantic dent.
You’ll also be covered from damages caused in accidents where no other car or object is involved — for example, a rollover caused by black ice.
Is Collision Insurance Required?
There are no states that actually requires you to carry collision insurance, but if you have a loan on your car or if you lease it, your lender will typically require you to have collision coverage. However, if you own your caroutright, collision coverage is optional.
If you do own your vehicle and decide to forgo collision insurance, keep in mind, this coverage helps you avoid paying out of pocket for repairs that end up costing more than your deductible, and if your vehicle is completely totaled, you’d be covered for your loss. This could save you a lot of money and stress. You’ll feel more secure on the road knowing you’re protecting a dream you’ve worked hard to make your own.
What Isn’t Covered by Collision Insurance?
Though collision insurance protects you in many ways, there are some instances where it doesn’t cover your vehicle — don’t worry, you can be covered under these other additional coverages:
Usually, collision insurance won’t cover damages to your vehicle that occur when it’s not being driven. Think storm damage, hail, falling objects, even theft and vandalism. This is where you’ll want to consider comprehensive coverage.
Bodily Injury Liability Coverage
Collision coverage also doesn’t cover expenses related to bodily injury liability. For instance, if you cause a crash and injure someone in another vehicle, you’ll usually be covered with your auto insurance policy’s additional bodily injury liability coverage — and that can help pay for their medical bills.
Medical Expense Coverage
Generally, medical expense coveragecan help pay for medical costs incurred from an auto accident. It may help cover medical expenses for you, your passengers and family members who may have been driving the vehicle at the time of the accident.
And medical expense coverage also may help cover you in the event you or a family member is injured in another car or as a pedestrian. Remember, medical payments coverage actually extends to your passengers, where your health insurance does not.
Uninsured and Underinsured Motorist Coverage
These separate but similar coverages help you out in the event you’re hit by a driver who has no insurance, or some — but not enough to cover the cost of the damages.
Also, if you’re in a hit and run, these coverages have your back. If you don’t have uninsured or underinsured motorist coverage, you could be dealing with a big headache and having to pay out of pocket for any damages done to your vehicle.
Check out our auto insurance comparison guide to help you understand how customizing your auto insurance policy with the right coverage can protect you mile after mile.
When Do You Use a Collision Insurance Deductible?
If your car is damaged in a collision accident, your collision deductible a set amount of money you will pay out-of-pocket prior to your insurance payment coverage. For instance, let’s say you get into an accident caused by another driver, resulting in damages over $5,000.
You and your insurance agent already agreed upon a set amount of money for your deductible when building your policy. So, it’s no surprise that you’ll be paying some money for damages — even if the accident wasn’t your fault. If your deductible is $1,000, you’ll pay $1,000 towards the damages, and American Family will pay the remaining $4,000.
How high your collision insurance deductible is set is up to you your choice, but keep in mind, the lower the deductible, the higher your monthly premium. And vice versa — the higher the deductible, the lower your monthly premium will be.
What Is Accident Forgiveness?
Accident forgiveness is part of a car insurance policy that keeps your driving records safe and your insurance premiums from being raised by insurance providers after an at-fault accident. Your good driving habits can pay off!
If you and the drivers on your policy have been accident-free with your current insurance company for five consecutive years, switch to us and your first accident won’t cause a rate increase* — no matter the expense of your claim.
Collision coverage is just one more way for you to gain peace of mind on the road. Talk with your American Family Insurance agent to find out how you can customize your auto insurance coverage to keep you driving safe, happy and protected.
*Must have no major traffic violations in the household to be eligible.