When buying car insurance, you have many coverage options to choose from. While you must carry liability insurance to protect other drivers, you do not need to carry collision and comprehensive coverage unless required by your lender.

Collision insurance coverage insures your car against damage suffered in a collision with another car or object, so it’s a good idea to consider adding it to your policy. Here’s everything you need to know about collision coverage before deciding if you want to add it as optional coverage to your auto insurance policy.

Collision insurance covers damage to your car in the event of an accident. Collision coverage, as a part of your car insurance, helps pay for repairs to your car when you:

Keep in mind that coverage of hit-and-run cases by collision insurance can vary by state, especially in no-fault states. No-fault insurance means that when you get into a car accident, your insurer pays for certain damages and repair costs, no matter who’s at fault.

Collision coverage can come in handy, especially if your car is declared totaled after an accident. This type of insurance will pay the replacement costs for your car in this instance. Remember that you must also pay a deductible before a car insurance company covers any repairs from an accident. A deductible represents the amount you must pay before the car insurance policy pays out, with a lower deductible equaling a higher premium payment from you.

Collision coverage does not cover damage to your car that occurs while parked. This damage type falls under the purview of comprehensive insurance coverage. Collision coverage does not cover damage to your vehicle from:

In addition, collision coverage does not cover any medical payments connected to bodily injury or loss of life. Incidents such as these fall under either bodily injury liability coverage, medical payments coverage, or personal injury protection.

To determine if you need collision coverage, multiply the value of the premiums you paid in the last five years. If the result amounts to more than the current value of your car, you do not need collision coverage.

To check the value of your car, visit car valuation websites like Kelley Blue Book, Edmunds, and Autotrader.com.

A collision deductible waiver comes into play if your car suffers from a collision with an uninsured driver. If an uninsured driver hits your vehicle and you have a collision deductible waiver, you end up paying no deductible.

One condition exists for the use of a collision deductible waiver: You need to identify the at-fault driver. If the driver flees the scenes, you might end up paying the bill. So, make sure to get as much information as you can from the other driver in case this happens.

To determine if your collision insurance carries a collision deductible waiver, check out your insurance’s declaration page where you can find it listed, if you have one. Otherwise, call your insurer and ask. They can tell you if your policy has a collision deductible waiver.

The cost of collision coverage on your car insurance depends on the amount you want and how much of a deductible you opt for. While no states require you to carry collision coverage, many lenders make this coverage a requirement when buying or leasing a car.

Deciding on whether to opt for collision coverage on your vehicle depends primarily on the value of your vehicle. While lenders require you to carry collision coverage on cars you still owe on, such as a new car or lease, states do not require you carry this coverage.