What Is Collision Insurance? Do You Need It?
Apr 27, 2022 · 7 min read
- What is it?
- What does it cover?
- How does it work?
- Coverage deductibles and limits
- Should I have collision insurance?
- Finding collision quotes online
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Collision insurance is a type of car insurance that protects you financially if you’re involved in a collision with someone else’s vehicle or another object.
Jerry has compiled all the key information about collision coverage so you’re armed with the right knowledge when you’re searching for car insurance quotes online.
If you’re looking for cheap car insurance, Jerry can find affordable quotes for you in under a minute. It takes 45 seconds to sign up for this free app, and once you do, it can help you switch plans, cancel your old policy for you, and monitor your rates every six months going forward.
What is collision insurance?
If you get into a collision with someone else’s vehicle or another object while you’re driving, collision insurance will pay for your repairs. Collision coverage also kicks in if you get into a single-car accident.
According to the National Association of Insurance Commissioners, the average yearly cost of collision coverage is over $360. But because car insurance is so unique to each driver, this figure can vary greatly.
Unlike liability insurance, which is required in most states, collision insurance is not a legally mandated coverage.
However, if you finance or lease your car, it’s virtually guaranteed that your lender will require you to carry both collision and comprehensive coverage until your vehicle is completely paid off.
If you need collision coverage, Jerry can help you get it for an affordable price. The app does all the work to compare and buy car insurance, saving you time and money.
What does collision insurance cover?
Collision coverage covers you when you get into an accident with another vehicle, hit a stationary object, are involved in a rollover, or are the victim of a hit-and-run. Even when you’re at fault for the accident, collision insurance will pay for the repairs.
Accident with another vehicle: Whenever two or more vehicles are involved (e.g., another passenger vehicle, motorcycle, RV, or bus), collision insurance covers the cost of damage to your car from an accident.
Hitting a stationary object: If you accidentally hit a street sign, guardrail, storefront, or anything else that isn’t intended to leave a mark on your car, collision insurance applies. Fire hydrants, trees, and even potholes qualify as stationary.
Rollovers: Whether you’re swerving to avoid a collision or you hit a patch of ice and slide into a ditch, collision insurance covers you when you overturn your vehicle.
Hit-and-run accidents: Whether you’re behind the wheel or your car is parked at the time, if you’re the victim of a hit-and-run, collision coverage takes care of the damage.
How does collision auto insurance work?
Collision coverage reimburses you for the cost of repairs to your vehicle when you’re in a car accident. Other types of car insurance cover other aspects of losses from an accident.
The goal of collision insurance is to provide you with the money needed to restore your vehicle to its pre-accident condition.
If that’s not possible, or if your insurance company deems the damage to be too extensive for repairs, your car will be declared a total loss and you’ll be paid out for the cost.
If you have a car loan, your insurance company will pay out the loan first and you’ll collect the remainder of the payment to spend however you see fit–for example, as a down payment toward your new car.
How do collision coverage deductibles and limits work?
Your collision insurance deductible is a specified amount of money that you must pay before your insurance company will pay out your claim when you are the at-fault party.
If you get into an accident and your car has $20,000 in damage, your insurance company will pay for those repairs minus your deductible amount. Your deductible could be $250, $500, $1,000, or another figure you’ve chosen.
So, in the above example of $20,000 in damages, if you have a $500 deductible, your insurer would pay out $19,500 for the repairs to your vehicle.
If the repairs cost less than your deductible, your insurance company would cover nothing and you’d foot the repair bill yourself.
When another insured driver is at fault, either their insurer will pay the costs, including your deductible, or your collision insurance will seek to be reimbursed for the deductible from the other company.
Additionally, some insurers offer free glass repairs as part of collision insurance. If you have a crack or chip on a window that needs to be repaired, it’s often done without a deductible. Glass replacement generally will have a deductible, though.
Should I have collision insurance?
For most drivers, collision insurance is a sound investment. It’s probably the right choice for you if you can’t afford to fix or replace your car on your own, if you have a car loan or lease, or if your car has significant value to you.
Collision insurance may not be right for everyone, though. You may not need it if your car is old, in long-term storage, or already covered under a different policy.
When you’re searching for cheap car insurance, keep in mind that you’ll only have the option to forego collision insurance if you’re no longer making payments on the vehicle.
How to search for collision insurance quotes online
It’s easy to compare car insurance quotes online. Instead of checking each insurance company’s prices one by one, let Jerry do it quickly and easily for you.
All you need to do is answer a few questions and Jerry takes care of the rest, comparing prices from over 40 major insurance companies to find you the right coverage at the best price.
When you’re ready to switch, Jerry will handle the paperwork and phone calls to set up your new policy. It will even cancel your old policy for you and get you a refund for any unused premium!
As a licensed broker, Jerry can also send you new quotes every time your policy comes up for renewal. This guarantees that you’ll never overpay for collision coverage and car insurance again!
Don’t just take our word for it. Check out what Jerry user Jonathan Osorio-De La Rosa said in his five-star review:
"This app is really cool. It let me customize my preferred auto and renters insurance policies and made me realize I was overpaying by over a hundred dollars a month for the same coverage just by switching over. It's apps like these that make doing research so easy."
Do I need collision insurance?
If you're leasing or financing your car, your lender will probably require you to have collision insurance. If you own your car, however, you will not be legally required to have collision insurance.
What is comprehensive insurance vs collision insurance?
The difference between comprehensive insurance and collision insurance is that collision insurance covers damages from crashes, whether that be a car crash or a car hitting a pole. Comprehensive insurance, on the other hand, covers non-crash damages, such as uncontrollable events or inclement weather damage.