Whether you’re buying a new policy or, heaven forbid, you’ve been in an accident you’ll probably be asked if you have “Collision” insurance. If you’re considering how much coverage you should have and/or are wondering how collision works, here it is in a nutshell.
Collision pays for damage to your car from, you guessed it, a collision! It doesn’t matter who caused the accident. Simply put, if you have collision coverage your insurance will pay for damage to your car (minus any applicable deductible). If your car is financed your bank may require you to have collision and may stipulate the deductible required. Remember that your Property Damage Liability coverage does not cover damage to your vehicle.
Simply put, if you have collision coverage your insurance will pay for damage to your car (minus any applicable deductible).
Options when buying collision insurance
Buying Collision coverage with a “waiver of deductible” provides the following benefits: If you’re in an accident where you are less than 50% responsible and can identify the other driver, you don’t have to pay your deductible. This is very useful when the other driver isn’t insured or has inadequate insurance. You also are not required to pay your deductible when another driver who is insured causes an accident. (Their “Damage to Someone Else’s Property coverage up to his limit will pay for your damages.)
As your car ages, and decreases in value, an option to consider is Limited Collision. Limited Collision is very inexpensive and provides coverage for accidents in which you are less than 50% at fault and can identify the other vehicle. Coverage does not apply if you are at-fault, but your insurance would cover repairs to the other person’s vehicle under your Property Damage section.
If your car’s value is very low, the wise choice may be to NOT buy collision (unless required to by a lender). If your car has exceptional value due to its condition (classic and antique cars) you should have it appraised and properly insured before declining this coverage.
Ready to learn more?
What’s the most effective way to manage your auto insurance premiums? Acacia Insurance has been helping to make the unexpected uneventful since 1988, and we look forward to working with you. Please contact us with questions and for additional information.