The Definition of Collision Insurance
Collision insurance protects auto owners in the event of an accident where there is damage to their cars. There is a large number of people who are sure they’ll never get into an accident or wreck their own cars, but according to market research studies, the average American driver is involved in a car accident every ten years. Your driving habits can also be a factor in how likely you are to get into an auto accident, such as if you drive late at night when drunk drivers may be out on the road, or if you drive in an urban area and park your car on the street. It’s a wise decision to have collision coverage on a car that’s fairly new or worth more than a couple thousand dollars.
In addition to covering the damage that you cause to your own vehicle, collision coverage protects you in the case of accidents that aren’t your fault, too!
Collision Insurance Helps When:
- YOU cause an accident, and pays for the damage to your vehicle
- If you cause an accident and wreck your car, your insurance will pay to repair your vehicle as a condition of your collision coverage. If you’re the repairs cost more than the market value of your car (otherwise known as “totaling” your car), your insurance provider will give you the money to replace your car, based on how much your car’s make and model is currently worth.
- ANOTHER DRIVER causes an accident, and pays for the damage to your vehicle
- If your car is damaged because another driver caused an accident, your insurance provider will pay for your damages to expedite the process, then pursue the other driver’s insurance company for reimbursement.
- This option isn’t the default protocol for such a procedure, but is something that you can demand of your insurance provider if the other driver’s insurance is being slow or difficult in covering the cost of your repairs. When you have collision coverage, this is an aspect of protection to which you’re entitled.
- Although this option shouldn’t be a reason for your provider to raise your premium rates, since the accident wasn’t your fault, make sure you check with your insurance adjuster before taking this approach.
- OTHER ELEMENTS cause damage to your car that aren’t covered by other parts of your policy
- If you don’t have comprehensive coverage for instances such as vandalism, natural disaster, theft, etc., you can usually claim those kinds of losses under your collision coverage.
- Hit-and-run accidents or damage to your car caused by an uninsured driver would also usually fall under collision coverage.
- Using your collision coverage to cover these kinds of incidents may cause your rates to increase, because your insurance company may process the claims as if you were at fault for the damage. Having comprehensive and underinsured motorist insurance is the safest way to cover yourself in these types of scenarios.
Now that we’ve explained the collision insurance definition, we’re going to look at when to drop collision coverage on your vehicle in our next blog! Check back in with us on Wednesday for more!