What Does Collision Insurance Cover?

Car accidents can happen at any time, even to the most cautious drivers. The good news is that having collision insurance can help protect you financially if you are involved in a car accident. In this article, we will discuss what collision insurance covers, how it works, and the benefits of having it.

What is Collision Insurance?

Collision insurance is a type of car insurance that covers damage to your vehicle if you are involved in a collision, regardless of who is at fault. It is an optional coverage, but it is highly recommended for drivers who have financed or leased their vehicles. Collision insurance can help cover the cost of repairs or replacement of your car if it is damaged in a collision.

How Does Collision Insurance Work?

When you purchase collision insurance, you will need to choose a deductible amount. The deductible is the amount of money you agree to pay out of pocket if you are involved in an accident before your insurance coverage kicks in. The higher the deductible, the lower your monthly premium will be. If you are involved in a collision and your car is damaged, you will need to pay your deductible amount before your insurance company will cover the rest of the cost of repairs or replacement.

For example, if your deductible is $500 and the cost of repairs to your car is $1,500, you will need to pay the $500 deductible and your insurance company will cover the remaining $1,000.

What Does Collision Insurance Cover?

Collision insurance covers damage to your vehicle if it is involved in a collision with another vehicle, a stationary object, or if it rolls over. However, it does not cover damage to another vehicle or property, or any injuries that you or other parties may have sustained in the accident. For these types of damages, you will need liability insurance.

The following are some of the damages that collision insurance can cover:

What Are the Benefits of Collision Insurance?

Having collision insurance can provide many benefits, including:

• Peace of mind knowing that you are financially protected if you are involved in a collision
• Coverage for damage to your own vehicle, regardless of who is at fault
• Ability to choose your own repair shop or dealership
• Protection for leased or financed vehicles
• Flexible deductible options to fit your budget

Closing Thoughts

Collision insurance can be a valuable coverage option for drivers who want to protect themselves financially in the event of an accident. By understanding what collision insurance covers and how it works, you can make an informed decision about whether this coverage is right for you.

Frequently Asked Questions

Is Collision Insurance Worth the Cost?

If you have a financed or leased vehicle, collision insurance is often required by the lender. Even if it is not required, collision insurance can provide valuable protection in the event of an accident. The cost of collision insurance varies depending on several factors, including your driving record, the make and model of your vehicle, and your deductible amount. You should weigh the cost of collision insurance against the potential cost of repairs or replacement of your vehicle if you are involved in an accident.

Do I Need Collision Insurance?

If you have a financed or leased vehicle, collision insurance is often required by the lender. Even if it is not required, collision insurance can provide valuable protection in the event of an accident. If you own your vehicle outright and are prepared to pay for any necessary repairs or replacement out of pocket, you may not need collision insurance.

Does Collision Insurance Cover Damage to Another Vehicle or Property?

No, collision insurance only covers damage to your own vehicle. For damage to another vehicle or property, you will need liability insurance.