Collision Coverage: Everything You Need to Know Before an Accident
Collision repair can be costly. Having the right insurance coverage can protect you against financial losses in case of an accident, no matter how large or small it is and no matter whether it is your fault or the other driver’s.
In most states, you are only required to have liability insurance. Different states may require different minimums, but generally speaking, you will typically need coverage that pays $15,000 for bodily injuries for any person involved in the accident or $30,000 for all people involved, and $5,000 for damages to the other vehicle.
You may notice that no coverage is required that pays for damages to your own vehicle. That’s where collision coverage comes in.
Collision coverage pays for damages to your vehicle in case of an accident, whether you are at fault or not. However, the coverage typically pays out when you are at fault. Otherwise, the other driver’s policy typically pays for the damages to your vehicle.
There are three cases in which you might need to use your collision coverage if you are not at fault for the damage:
- The other driver’s policy does not provide enough coverage for all the damage to your vehicle.
- The other driver’s insurance company is delaying payment. Your insurance policy will cover the damages, and then your insurance company will go after the other company to be reimbursed.
- Your car is damaged in a hit and run, and you are unable to identify the driver responsible.
Collision coverage pays only for damage to your own vehicle. If you are at fault in an accident, your liability insurance will pay for damages to the other driver’s vehicle.
What’s Not Covered
It is important to note that collision coverage pays for damages from any collision, including hitting a tree, a telephone pole, a fence or some other item. The policy does not pay for damages from fire, falling trees, theft or other accidents. Comprehensive coverage is designed to pay for damages from these types of incidents.
Collision coverage also does not cover damage resulting from:
- Routine wear and tear, flat tires, or mechanical or electrical problems
- Speed racing
- Transportation for hire
The coverage will also not pay for damage that you intentionally cause or damage to accessories that have not been permanently installed in your vehicle, such as custom paint jobs, rims or speakers.
Do You Need Collision Coverage?
Generally speaking, we think that every person needs all the insurance coverage they can afford. You never know what might happen to your car or what accident might befall you. A tree could fall on your car in a storm, or a drunk driver could blindside you at a green light. Without the right insurance coverage, you could be out thousands of dollars in medical costs and collision repair costs.
If you have a newer vehicle or a specialty vehicle, investing in collision coverage is a must. With a new vehicle, you are likely to still be financing it. If you are in a serious accident, your car could be totaled, but you could still owe thousands of dollars on it. Without the right insurance, including collision coverage and GAP coverage, you could be paying off the car for years without actually being able to drive it.
If you have a specialty vehicle, you could end up paying even more. Custom cars and high-end luxury cars can cost thousands of dollars to repair, and standard liability insurance is not enough to cover that bill.
You may be able to skip collision insurance if you drive an older vehicle that has been paid off. After you’ve been in an accident, the insurance company will ask you to get an estimate for the collision repair. If the cost is greater than the value of the car, the car will be totaled. You will get a check for the value of the car.
The likelihood that an older car will be totaled in an accident is high since cars depreciate in value quickly. Therefore, collision coverage may not offer you much more protection in case of an accident.
How Much Does It Cost?
Like all types of insurance, the cost of collision coverage depends upon a variety of factors. Primarily, the type of car you drive, its age, and how much coverage is provided will determine the premium for the policy.
You can manipulate the cost of the premium by playing around with the deductible. If you choose a higher deductible, the premium will be lower. However, you must be prepared to pay out that deductible in case of an accident. No insurance benefits will be paid until you first pay the deductible.
A $1,000 deductible may sound great when you are trying to lower your insurance premium, but it likely won’t sound that great when you have to pay it after your accident.
Find the comfortable middle ground of a deductible that is low enough for you to afford in case of an accident yet high enough to lower your premium to an affordable monthly level. For many people, this means a deductible of between $250 and $500.
You might also be able to lower your premium by purchasing multiple insurance products from the same company. That can include multiple auto insurance policies for multiple cars in your household, or it can include other insurance products like homeowner’s insurance and life insurance. You may also qualify for discounts for automatic debits for your monthly payments, for paying the whole premium up front, or for your affiliations and memberships.
DePaula Chevrolet can’t help you with collision insurance coverage, but we do provide expert, affordable collision repair. We work with a variety of insurance companies to make providing estimates and processing checks easy. We work directly with adjusters to handle much of the process for you so that you can focus on getting back on your feet after the accident. We’ll make sure that your car looks as good as new with our expert workmanship and high-quality materials. Call us today to get an estimate for your collision repair.