Collision coverage is one of the most essential components of Automobile insurance. If you are wondering, "What is auto collision coverage, and how does it protect your vehicle from damage?" you might have come to the right place. Buckle up your seat belt, as we will walk you through everything you need to know about collision coverage, from its primary to its minor details.
What is Auto Collision Insurance
Automobile collision coverage is car insurance that covers the overall costs of repairs or replacements done to your vehicle in the case of damage in an accident. It doesn't matter who caused the accident or if it happened on its own, the damage is what's important to notice is the damage.
Even if your vehicle collides with trees, buildings, fences, or nearby objects, you need not worry, as the collision coverage in auto insurance handles it all.
Find Cheap Auto InsuranceCollision Coverage in Auto Insurance – What It Covers
Accidents with Other Vehicles
Suppose your vehicle collides with another one; in this case, the collision coverage will pay for the repairs needed for your car. This coverage is applicable even if the accident was met by your end or the other driver's.
Single-Car Accidents
If you are involved in a single-car accident, such as crashing into a tree, fence, or any nearby object, and wondering what is auto collision insurance in this case, set your worries aside as your insurance will cover the damage to the car at all extents.
Rollover Accidents
Collision coverage helps you pay for damages or car replacements in the worst cases. This is applicable if your car rolls over due to losing control or meeting an accident and then rolling over while causing damage to the vehicle.
Pothole Accidents
If your car is damaged after hitting a pothole, collision coverage will handle it as well. Pothole accidents cause significant damage to your car's suspension and tires, which are costly to repair. Getting collision coverage might be the best option to handle the finances efficiently.
Collision Coverage: What It Doesn't Cover
Damage Unrelated to Driving
Collision coverage is not responsible for paying for damages that are unrelated to driving, such as damage to your car due to harsh environmental conditions (hail, flood) or vandalism. These damages are typically covered through comprehensive insurance and not collision coverage.
Medical Expenses
Collision coverage does not cover medical expenses that arise after or due to the accident; PIP (personal injury protection) is responsible for taking over or paying medical bills to insure individuals' damage.
Damage to An Uninsured or Another Person's Vehicle
If you have an uninsured vehicle, the collision coverage in auto insurance is not responsible for the damage. Similarly, if your car causes the accident, collision coverage is not responsible for the other person's vehicle. In such cases, liability insurance handles the costs of repairs to another damaged vehicle.
Loss Exceeding the Policy Limit
Collision coverage policies have certain limits. You must pay the difference if your repair costs or vehicle replacements exceed the limit.
Deductible and Limits – Collision Coverage Chapters
By this time, you are aware of "What Is Auto Collision Insurance," so let's move on to deductibles and set coverage limits accordingly:
Deductibles: Deductibles are the amounts you pay from your pocket before your collision coverage kicks in; generally, deductible amounts range from $250 to $1000. Choosing a higher deductible will lower your premium, but you will have to pay more when you file a claim.
Coverage Limits: The maximum amount your insurer pays for a covered claim is called a coverage limit; it is typically based on the actual cash value of your vehicle at the time of the accident. Suppose the repair costs exceed the ACV (actual cash value); your insurance will only cover up to the limit, and you will have to cover the remaining amount.
Why Should I Get Collision Coverage?
Protecting Your Investment
You can protect your asset (vehicle) through collision coverage, which covers the repairs and replacements when it is involved in an accident. You must pay out of your pocket without collision coverage, which might cost a dime.
Financed/Leased Vehicles
If you finance or lease your car, the lender will require you to carry collision coverage to protect their investment in case of accidents.
Comprehensive Protection
Collision coverage provides comprehensive protection for your car, taking care of its repairs, maintenance, and replacement in the worst cases.
Reduced Stress About Financial Burden
Once you know that your collision coverage will handle the repair or damage costs in the case of accidents significantly reduces the stress of financial burden in your mind.
What is Collision Coverage in Auto Insurance
One might wonder, "What is Collision Coverage in Auto Insurance?" the answer is that it is a helping hand that pays for the repairs, replacements, and damages done to an insured car when it meets an accident. It is essential to protect your vehicle as it is a meaningful investment; collision coverage ensures that you don't have to pay hefty bills directly from your pocket.
Collision coverage is not a legal requirement but a helpful recommendation by financial experts. Lenders require it if you have the vehicle on loan or lease.
Collision Coverage Statistics and Insights
● The average cost of collision coverage in the United States of America is approximately $869 to $2681 per year. This cost depends on your driving record, vehicle type, and residence location.
● Around 79% of insured drivers in the U.S. carry collision coverage, highlighting its importance among vehicle owners.
What Happens If I Don't Have Collision Coverage?
● If you don't have collision coverage and get in an accident, you will be responsible for all the damages and repairs. Without collision coverage, it can be a huge financial burden on your pocket, and if the damage is extensive, God save us all!
● If you have liability insurance, it will only cover the damages to property and medical expenses, not the damage to the vehicle.
● Without collision coverage, you will have to pay for your car's repair and the temporary transportation you choose as an alternative until it is fully restored; this is a double financial burden that might dissolve your savings.
● If you have an older vehicle with a low market value, the collision coverage cost might outweigh the benefits, such as making potential repairs to make the car run efficiently and increase its value.
● If you have a car loan or lease, the lender or the leasing company requires collision coverage as a necessary condition for the vehicle’s safety. If your car gets in an accident during the process and you don’t have collision coverage, you must pay off the loan even if the vehicle is not drivable.
Why It Matters
Collision coverage is undoubtedly a helpful and vital part of auto insurance, protecting your vehicle from damages resulting from accidents. Understanding what auto collision coverage covers, what it does not, its limitations and deductible, and why it is important to get it can save you from financial burdens. You can freely wander city streets and rural roads as collision coverage ensures that your investment is well protected at all times.
The right deductible and coverage limits help consider the benefits of collision coverage, such as driving with confidence and being fully prepared to face unexpected accidents that aim your way.