What is Collision Insurance?April 29, 2016
What is the definition of collision insurance? How is it different from other coverages such as liability and comprehensive? Insurance coverages can be confusing, especially when their names are as similar as collision and comprehensive. So what is collision insurance and how does it work? Collision insurance is a type of coverage you purchase to cover any damage to your vehicle resulting from an impact with an object made while your car is in motion. If your car is damaged as a result of fire, flood, strong winds, or theft, then you need to take a look at our article about comprehensive coverage.
Why You Need Collision Insurance
Collision insurance coverage is there to protect you if you are driving a vehicle for which you would not normally be able to pay for repairs out of pocket. Let’s say you bought a brand new car, you’d probably want collision coverage on that because if you were involved in an accident that was your own fault (you hit something, not the other way around) you would have to pay for the repairs which could potentially be expensive.
We should also mention that if your car is leased or is not fully paid for, most lenders require that you maintain collision insurance coverage as part of the terms of the lease or loan. More often than not, you’ll have to provide proof of coverage.
What Else Should I Know About Collision Insurance?
Collision insurance is not required in any state. While laws regarding car insurance vary from state to state there are no states that currently require drivers to carry collision insurance. For drivers who are driving older cars or don’t mind driving around a car with a big dent or missing bumper, they have the option to forgo collision coverage. This then means that they are responsible for repairs to their own vehicle when it comes to damage incurred through their own actions (they can still be reimbursed for repairs if they are rear-ended). This can be a convenient means of saving money on monthly car insurance premiums, but it isn’t right for everyone.
Car Insurance Saving and Collision Coverage
Everyone wants a lower price on car insurance. For some, getting rid of collision insurance might help them achieve that. But before putting yourself at risk, we recommend checking around to see if you can get the same coverage you are currently getting for a lower price by getting a quote from compare.com.
Auto Insurance A to Z
It’s easy for a lot of folks in auto insurance to forget that most people don’t know what they’re talking about when they refer to liability coverage, or an SR-22. Our Auto Insurance A-Z Guide helps decrypt things, unpacking these concepts into language you and I can understand.