What Is Collision Car Insurance?
Collision insurance is a type of coverage that helps pay for repairs to your car after an accident, even if you were at fault. Overall, this kind of insurance can help you pay less out of pocket if something bad happens, but it may not be right for everyone. Most of the time, collision coverage is optional, but it may be required in some situations.
Here’s everything you need to know about collision car insurance, including how much it costs, what it covers, and when you might want it.
Depending on your policy and where you live, collision insurance may also pay for repairs if you flip your car, get hit and run, or even hit a pothole.
If you already have collision insurance or are thinking about getting it, it is always a good idea to talk to an agent about your coverage. They can help you figure out what a collision policy covers and what it doesn’t.
What does collision insurance cover?
If you have collision coverage and get into an accident, you can file a claim to help pay for the cost of fixing your car, no matter who was at fault. Same thing if you get into an accident and your car is a total loss (i.e., the damage is so extensive that your car is beyond repair).
What if you weren’t the one who caused an accident? Most of the time, the insurance of the other driver would pay for your repairs. But if they don’t have insurance or if they don’t have enough insurance, your collision coverage can help pay for the damage.
When you file a claim for a collision, you have to pay your deductible, but your insurance company will pay for the rest of the repairs up to the value of your car on the market. For example, if your collision policy has a $500 deductible and the cost of fixing your car is $1,200, you would pay $500 out of pocket and your insurance company would pay the other $700.
Who needs to have collision insurance?
Even though collision coverage is usually optional, there are times when it might be required. Most of the time, this is true if you lease or finance your car. That’s because every time they give out an auto loan, lenders take a risk. If you get in an accident and damage their car, collision coverage helps them protect their investment.
But the benefits aren’t just for lenders. If you don’t have collision coverage and get into an accident, you may have to pay for repairs as well as the rest of your car loan. With collision coverage, you can avoid this expensive situation. If it makes sense for you to do so, you can drop collision coverage once you’ve paid off your car.
Even if collision coverage isn’t required, it may still be a good idea to get it. For example, collision insurance can be helpful if you know you wouldn’t be able to pay for possible repairs after an accident, but you could pay for the premiums. Also, if your car is expensive to fix, this type of coverage can protect you from a lot of the accident-related costs, as long as they are more than your policy’s deductible.
How much does insurance for a car that gets hit cost?
The Insurance Information Institute says that collision insurance costs an average of $290 per year. But your actual rate will depend on a number of things, such as how well you drive and what kind of car you have.
For example, if you don’t have any accidents on your record, you can usually expect to pay less than someone who has been in a lot of accidents or is otherwise seen as a high-risk driver. In the same way, if you have a car that would be very expensive to fix, your rates will probably be higher than someone with an older car that costs less to fix.
It’s also important to think about the deductible when figuring out what your costs might be. Most collision insurance deductibles are between $250 and $1,000, and usually, the lower the deductible, the higher the premium. You should choose a deductible that you can afford to pay if your car gets damaged.
Shopping around for coverage is a good way to figure out how your situation will affect your rates. By doing this, you can avoid overpriced policies and find the one that fits your budget and coverage needs the best.
Is it worth it to buy collision coverage?
The value of collision car insurance depends on your situation, just like the value of many other types of auto insurance. As was said above, some drivers will be required to buy a policy, especially those who rent or lease their car. If that sounds like your situation, a collision policy is probably a good idea.
You might want to buy coverage for more than just the money. If you’re to blame for an accident, liability coverage will help you pay for repairs to the other vehicle(s), but not to your own.
This is when collision coverage starts to pay out. Also, if you have a newer or more expensive car and the cost of repairs is more than the cost of collision coverage, it might be a good idea to buy a policy.
In general, you should look at your budget, the cost of your policy, and the value of your car to decide if collision insurance makes sense. Make sure that the deductible fits into your budget and is less than what a car accident could cost you.