Collision coverage
What does collision coverage do?
Collision (COLL) covers your insured vehicle for physical damage that your car sustains when it hits, or is hit by, another vehicle, or another object. Collision also covers the upset of your vehicle, such as the unintentionally rolling or flipping of your vehicle.
Collision coverage will pay out for covered damages, less your deductible amount, regardless of fault. Collision will pay out, according to the terms and conditions of your policy, if the other driver is uninsured or underinsured or even if you are at fault.
When receiving a quote for collision coverage, you will need to choose a deductible amount. In general, the range you can choose for your collision deductible is anywhere from $100 to $2,500 (deductible choices vary according to state laws and insurance company guidelines).
A deductible is the portion of a claim that you’re responsible for paying before your insurance coverage kicks in. A higher deductible can substantially lower the cost of insurance premiums.
You should balance the savings of a higher deductible against your ability to absorb a larger out-of-pocket expense. For example, if you set your deductible at $1,000 and your car sustains damages totaling $1,500, you will pay $1,000 and your insurance company will pay $500.
Is collision coverage mandatory?
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Collision insurance is not required by any state, but if you have a loan or lease on your vehicle, then your lienholder will normally require that you carry this coverage and may mandate the specific deductible amount you have to select.
What happens if I don’t have collision coverage?
Without collision coverage, you may be left to pay out of your own pocket for your car’s repairs unless there is someone else found liable for the damages, such as an at-fault driver who has property damage liability coverage with which you can make a claim through. Or if you are hit by an uninsured motorist and have uninsured motorist property damage coverage under which you can make a claim.
With a newer, high valued car, you will normally want this added protection for your vehicle, whether you have financed it or not.
If you have an older car with a low value (without a lease or loan on it), you may not want to pay for this coverage since if the car is damaged, or totaled, the low insurance compensation amount may not be worth the premium paid out.
Knowing how much your vehicle is worth can help you determine if collision coverage is worth the price. Find out the current value of your car by using appraisal tools offered on sites such as Kelley Blue Book (KBB), NADAguides, and Edmunds.
Disclaimer: This article is for information purposes. It should not be interpreted as a recommendation to buy or sell any insurance product, or to provide financial or legal advice. This information is provided for information purposes only.
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