Collision insurance is coverage that helps pay to repair or replace your own car if it’s damaged in an accident with another vehicle or object. Show
What does collision insurance cover?
Collision insurance is offered by your insurance company to kick in after the following scenarios:
Is collision insurance required?It depends. Unlike liability coverage, collision insurance is not required by law. That means that you can choose not to have the coverage, but you might end up regretting your decision later. If you get into an accident, and the accident is your fault, you would be responsible for the damage that you cause to your own car. That can run into the thousands of dollars, and may require you to fully replace your car. While the state you live in won’t require you to get collision coverage, your lender will usually require it if you haven’t bought your car outright. If, like most people, you buy your car and take out a loan — financing it through a bank — the bank will require you to take out a full coverage policy, which includes collision coverage. This is also required when leasing a car, as well in the case of new financed purchases, and used financed purchases. Why does your lender care if you have collision coverage? Lenders require auto insurance coverage because they hold your car as collateral for your loan. If you stop making payments, they can take your car to pay off your balance. If you get into an accident and your car is totaled or not drivable, your bank may end up on the hook for the loan. Collision coverage policy limitsEvery portion of your car policy comes with a limit to the various types of car insurance coverage. That limit is the most that your insurer will cover in the event that a claim is made. Collision coverage is usually an exception to this rule; the limit is usually the actual cash value of your car (minus your deductible, of course). Here’s an example of how this works: Let’s say your car slides on black ice, sending you into the median. It’s one expensive slip: The damage to your car is estimated to be around $10,000. The vehicle is assessed and the actual cash value of your car is determined by the adjuster to be $26,500. Since the damage amount is less than the actual cash value of your car, this scenario wouldn’t be a total loss, and the insurance company would pay out the amount to repair your car, minus your deductible. In this case if your deductible was $1,000, the insurance company would pay out $9,000 ($10,000 of damage mins that $1,000 deductible) to pay for the repairs to your car. Collision deductiblesAnother part of your collision insurance policy to keep in mind is your deductible. You decide on the deductible amount when you buy your insurance policy. The deductible is the portion of repairs that you pay, before your automobile insurance kicks in to cover the balance. On a Lemonade Car policy you can choose your deductible, between $250 and $2,000. If you lease or finance your car, you may want to check if there’s a maximum deductible the lender will allow you to have on your car insurance policy. There are some other policies (usually commercial) with higher deductibles. A Lemonade Car policy allows you to choose your collision deductible, and allows you to pick a different deductible for the other coverages on your policy too, like for your comprehensive insurance.
Also keep in mind that while collision car insurance is optional, many lenders require it if you’re leasing or financing your car. What Does Collision Insurance Cover?Collision coverage might seem simple, but it actually helps cover damages to your car from many different accidents. Collision insurance helps with accidents that involve:
Your collision insurance typically won’t cover:
To get these protections, many AARP® members choose to bundle their collision insurance with:
What Is an Example of Collision Insurance?Accidents can happen at any time and there are many reasons you might need collision insurance. For example:
What Is the Difference Between Collision and Comprehensive Coverage?Collision insurance helps cover the costs of repair for your car if you’re in an accident with another vehicle or an accident involving an object like a fence or a tree. Comprehensive coverage, also known as “other than collision,” is usually much less expensive and covers things like:
What Are the Deductibles for Collision Insurance Coverage?Your collision deductible is the amount you pay out-of-pocket for car insurance claims before your policy covers the rest. For example, if your deductible is $1,500 and your vehicle has $5,000 in damage, you would be responsible only for the $1,500 to pay to repair your car. Your insurance company and your collision insurance coverage would help pay the rest. How Much Does Collision Insurance Cost?The cost of your collision insurance can vary depending on your:
When it comes to insurance, usually the lower your deductible amounts, the higher your premium. So, if you plan to buy auto collision coverage, selecting a higher deductible generally helps lower the cost of your auto insurance. You must first have comprehensive insurance coverage for your car before you can buy collision insurance. You can get a car insurance quote online to find out how much you would pay for comprehensive and collision insurance. What Are the Benefits of Auto Collision Insurance Coverage? Get a Car Insurance QuoteTo learn more about our coverages that can help repair or replace your vehicle after an accident, get a car insurance quote today. What is meant by collision coverage?Let's start off with a quick definition of collision insurance: collision insurance is a type of auto insurance that can cover you in the event of a crash or accident with another vehicle or object if your car needs to be repaired.
What's the difference between collision and full coverage?Comprehensive coverage protects your vehicle from unexpected damage, such as a tree branch falling on it or hitting an animal, while collision coverage protects against collisions with another vehicle or object.
What does other than collision cover?Comprehensive, sometimes called "other than collision" coverage, typically covers damage from fire, vandalism or falling objects (like a tree or hail). If you're financing or leasing your car, your lender likely requires comprehensive coverage.
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In a car insurance policy collision insurance covers what
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