Whenever you take your car out on the road, you have a chance of getting in an accident. Even if you're a good defensive driver, other drivers, adverse weather conditions, and other circumstances beyond your control can lead to a collision.
Fortunately, you can protect yourself financially from this risk. Adding collision insurance to your auto policy safeguards against accidents when driving. In this guide, learn what collision insurance is, what it covers, and some tips for deciding whether you need it as part of your auto insurance policy.
Understanding Collision Insurance
The definition of collision insurance is a policy that covers damage to your vehicle from crashes. Whether you are at fault for the accident or someone else is, this insurance will help you pay for your vehicle's repairs. Or if your vehicle is totaled in the crash, collision insurance is there along with gap insurance to cover at least some of the replacement costs.
What Does Collision Insurance Cover?
Collision insurance covers damages to your vehicle from two main sources: collisions with other vehicles and collisions with objects.
For example, if you drive into another car and damage your vehicle’s bumper, your collision coverage would generally help pay for the repair cost. Similarly, if you hit a stationary object like a fence, your collision insurance coverage would also kick in to pay for the cost of repairs or replacement.
Collision Insurance vs. Comprehensive Insurance
While collision coverage and comprehensive coverage are both optional coverages and both cover damage to your vehicle, the circumstances they cover are very different.
Comprehensive insurance covers damage to your vehicle from non-collision incidents. These include natural disasters like earthquakes and fires, theft, falling objects, and vandalism. So if a tree falls on your car and totals it, you’d need to make a claim against your comprehensive car insurance to cover a replacement vehicle.
By contrast, collision insurance only covers vehicle damage from getting into an accident. If you hit another car or object, or another car hits you, that’s when you use your collision coverage.
The simple way to understand the difference between comprehensive vs. collision insurance is by asking this question: Were you driving the vehicle when it got damaged? If yes, the damage is likely covered by collision policy. If not, the damage may be covered by comprehensive insurance.
Why Collision Insurance Is Recommended
Vehicle repairs can be very expensive, which is why many people choose to purchase collision car insurance. This coverage is especially important for new vehicle owners because cars are worth the most when they’re new. A more valuable vehicle is more expensive to repair or replace, so having this insurance can offer great peace of mind.
Consider this situation: You just bought a new car worth $40,000. On the way to work, you hit another vehicle, and you’re at fault. Your car is totaled.
If you don’t have collision insurance in this situation, you’re out the $40,000 value of your new car. With collision coverage, your insurance provider would pay for some or all of the costs of buying your replacement vehicle.
Or in a situation where you just need vehicle repairs, your collision insurance provider would be responsible for helping to pay for those costs. Because you never know when you might get into an accident and need repairs, having collision protection can offer great peace of mind. You’ll know you’re protected against the high costs of vehicle repairs.
Factors To Consider
If you’re thinking about purchasing collision coverage but still want cheap car insurance premiums, it’s important to weigh your premium and deductible amounts. Choosing a higher deductible will mean lower premiums. However, if you do need to make a claim, you’ll owe more out of pocket.
Choose a deductible you can afford that still keeps your premium costs as low as possible. Getting multiple car insurance quotes can help you find the best deal on the collision coverage you want.
Is Collision Insurance Legally Required?
Collision insurance is not legally required in any state. It’s optional coverage you can add to your auto insurance policy if you’re worried about the cost of vehicle repairs.
However, some lenders may require you to get a collision policy if you’re financing your vehicle. This coverage helps protect their investment if something happens to the vehicle and you can’t repay your loan. Once you pay off the loan, you can choose to drop your collision insurance.
Finding the Right Policy for You
Whether you choose collision coverage or not, comparing your auto insurance options is the best way to get great coverage at the best prices. The good news is you don’t have to go hunting down quotes from many different insurance providers. Instead, turn to EverQuote.
This tool uses the information you provide about your driver profile and location to come up with a list of custom insurance options for you. You can easily compare how much each plan costs and what it covers to select the best fit.
Get your free custom car insurance comparison from EverQuote today. It only takes a few minutes.