Collision coverage: Protect your car from damages

by Guest » Mon Aug 27, 2007 05:12 am

Collision coverage will pay for any damages that your car may suffer due to collision with some other car or object. You may or may not choose to have this coverage. Many of you who own older cars may not like to purchase this policy. However, for those of you who have a new car, you may care to purchase this policy since repairing a new car can be expensive. If you do not have such a policy in place, you will have to pay out-of-pocket.

What does collision coverage include?

You may be a very cautious driver, but the fact is that accidents happen. If your car sustains damage due to the accident, having collision coverage helps. Car repairs can be a costly affair. Collision cover helps provide financial coverage to repair your much loved car if it gets damaged in an accident.

Even if you are a very careful driver, you may get involved in an accident. If it is not your fault, you can claim compensation for collision from the party at fault. But, if the accident is because of your fault then you cannot collect for the damages incurred. This is where collision coverage comes in to play. The good part is that collision coverage will pay for the damages even when the accident has not been your fault.

Do you need collision coverage?

Take a look at the top 3 reasons why you may need this coverage:

An accident is your fault and there has been severe damage to your car. You cannot collect compensation from the other party. Collision coverage will pay for the damages.
You think an accident is the other party's fault but the other party denies the charges. If you have a collision policy in place, you can get your car repaired and then your insurance provider can subrogate the other party for your claim. However, you may or may not be reimbursed the deductible in the full amount or even part of it.
You are involved in an accident with a third party that does not have liability insurance.

However, if you have an old car that is in very poor condition and is not expensive too, then getting auto insurance collision coverage is not a good idea. Since such coverage is based on the actual cash value of your car, it is not a good idea to purchase it if the market value of the car is lower than what you would pay as premiums. In such a case you may like to drop collision coverage.

How much collision coverage do you need?

How much coverage you will need depends on the type of vehicle you own and few other factors. You are likely to pay a higher premium for the following few reasons:

You own an expensive car
Your driving history reveals you to be an accident prone driver
Your car gets easily damaged
Your car is hard to repair
Your car has been stolen frequently

However, if you have a good safety record you may be lucky to get a lower premium.

How much will collision coverage pay you?

The basic factor on which depends the amount of coverage that you will receive is the worth of your car, what parts will be used to repair it and few other factors. Insurance companies pay only the Actual Cash Value (ACV) of the car. By ACV we mean the market value of the car before the accident occurred.

You will find several sources by which you can easily determine the actual cash value of your car. Your insurance company may have their own set of rules on how to determine the ACV in the area you reside in. Remember sun damages, dents and torn upholstery may lower the actual cash value of your vehicle.

How much deductible should you pay?

When you choose a deductible in collision coverage remember that this is the amount that you have to pay out-of-pocket. So, the amount that you choose must be affordable by you. Another important fact to remember is that the higher your deductible the lower your collision coverage premiums. However, this is a choice that is to be made by you depending on the financial grounds you are in.

Unlike the bodily injury liability, collision coverage is not mandatory in any state. It is entirely your choice whether you want to purchase this coverage. However, you may be obliged to purchase such coverage if you have leased the vehicle or have a lien on your car.

Total Comments: 19

Posted: Mon Aug 27, 2007 05:42 am Post Subject: simple questions..

Hi Norma,

I'd like to ask you some simple questions: Do you know the present worth of your vehicle ? Do you know the cost of coverage ? Now, this is a crucial decision-making phase where in you need to know if your vehicle needs collision protection.
Compare the cost of insuring your car offered in the market with the cost of repairing it or say for that matter replacing it!

This will give you an idea to choose the best way out!
Thanks, Evan

Posted: Mon Aug 27, 2007 05:50 am Post Subject: compare!

Hi there! You may rest assured that you'd definitely need it in case your car is leased or financed. If the worth of your car is a little more than that of the deductible then a collision or comprehensive coverage won't be the right choice. Just make sure that you get to calculate the premium value of your car for the next 6 months & multiply it by 4 to check and see if the resultant is greater than the actual value of your car. If its so, then I'd rather suggest that you don't for this physical damage cover. Hope you got my idea. Regards, Fatman

Posted: Mon Aug 27, 2007 06:15 am Post Subject:

Hi,
Though such coverage is not a must for your car, it always helps to be on the safer side and have one. Thus, its important to be clear in the mind, when you buy auto insurance, as to what collision and comprehensive policy covers.
* Collision coverage pays for damage or replacement incurred during an accident.
* Cases arising as a result of non-collision like, vandalism, fire, theft, etc. are covered under a comprehensive coverage.
Hope that helps!
andy007 :D

Posted: Wed Sep 05, 2007 11:16 pm Post Subject:

Hi there -

I'm going to add a little clarification to the collision vs. comprehensive loss definition, just so there's no confusion.

Comprehensive Coverage also covers auto-animal collisions (deer, dogs, cattle, birds, etc.), subject to your deductible. It also covers anything hitting your car OTHER THAN ANOTHER VEHICLE. (Tree, rock, lightning, hail, ufo's falling out of the sky-just kidding, etc.)

Collision Coverage will cover losses due to an accident with (or caused by) another car. However, the coverage will be subject to your deductible AND your form of insurance will make a big difference (tort or no-fault) - as well as who was at fault, and if it can be proven. For example - if you are forced off the road by another car, which leaves the scene, and you hit a tree, unless you can prove that the car that forced you off the road existed, YOUR insurance policy will have to foot the bill. This also applies when a deer or other large animal runs into the road in front of you, forcing you to slam on your brakes or swerve - if you hit a tree, fence, etc., your insurance company will treat it as a COLLISION LOSS, not a Comprehensive Loss, because you can't prove that you swerved to miss an animal - all you can prove is that you hit a tree or fence. That's why you will often hear it said that when an animal runs in front of you, it's better to hit it than to run off the road avoiding it - because it's easier to prove you hit an animal (evidence is usually left on the vehicle) than to explain that you were avoiding one. I know this sounds harsh to animal-lovers (I am one myself), but it makes sense from an insurance standpoint.

Hope this helps!

Posted: Thu Sep 06, 2007 05:34 pm Post Subject:

SueBe- you ar right! My elderly aunt swerved to miss two deer in the road, and went off the road doing alot of damage to her car.

When the insurance agent came out, he told her that next time to hit the deer, and she would have proof of her claim!!

I though she misunderstood, so I called, and he said the same thing. The problem with that is, that a deer that is running carries alot of force, and they have been several people killed on the roadways hitting them.

We have swerved alot of times to avoid them, just natural instinct, I guess!!

We quit carrying full coverage on our vehicles when they became older. We were paying high premiums and I finally realized that the cost/replacement/age/premium was not working!..Karen

Posted: Fri Sep 07, 2007 12:40 am Post Subject:

I'm going to add a little clarification to the collision vs. comprehensive loss definition, just so there's no confusion.

The clarification would be good... if correct.

Comprehensive Coverage also covers auto-animal collisions (deer, dogs, cattle, birds, etc.), subject to your deductible. It also covers anything hitting your car OTHER THAN ANOTHER VEHICLE. (Tree, rock, lightning, hail, UFO's falling out of the sky-just kidding, etc.)

Not even close. Collision is just that... covers your vehicle when it collides with anything or is upset (turned over). Comprehensive has 7 named perils. These include collision with an animal. So... when you run into a rock, tree, (you can run into lightning?) it's a collision loss, not comprehensive as you stated. Also listed under comprehensive is contact with a falling object. So running into hail or a UFO would be comprehensive... as long as it was suspended in air when it struck the vehicle. If it's on the ground, it's a collision loss.

Collision Coverage will cover losses due to an accident with (or caused by) another car. However, the coverage will be subject to your deductible AND your form of insurance will make a big difference (tort or no-fault) - as well as who was at fault, and if it can be proven. For example - if you are forced off the road by another car, which leaves the scene, and you hit a tree, unless you can prove that the car that forced you off the road existed, YOUR insurance policy will have to foot the bill. This also applies when a deer or other large animal runs into the road in front of you, forcing you to slam on your brakes or swerve - if you hit a tree, fence, etc., your insurance company will treat it as a COLLISION LOSS, not a Comprehensive Loss, because you can't prove that you swerved to miss an animal - all you can prove is that you hit a tree or fence. That's why you will often hear it said that when an animal runs in front of you, it's better to hit it than to run off the road avoiding it - because it's easier to prove you hit an animal (evidence is usually left on the vehicle) than to explain that you were avoiding one. I know this sounds harsh to animal-lovers (I am one myself), but it makes sense from an insurance standpoint.

Not exactly... when you swerve to miss a deer and collide with something it's not collision because you cannot "prove" you swerved to miss a deer (as even if you could, let say, through the use of several witnesses or video) it's still collision as (and here is the thing) your never _collided with the animal_ as described as a named peril under comprehensive coverage.

As far as the statements initially made in the last quote paragraph, they are really not correct either. Someone else being liable for a loss or not is the core part of who ultimately pays for the loss. If you have collision insurance, to address your loss, then this only changes what options you have to initially settle your own loss. I mention this as you segway this right into proving a deer caused you to collide with something, making it a comprehensive loss... which is incorrect.

Posted: Fri Sep 07, 2007 12:50 am Post Subject:

When the insurance agent came out, he told her that next time to hit the deer, and she would have proof of her claim!!

As mentioned above, I think there was a misunderstanding/misquote. If your grandmother would have struck the deer, there would have been proof of a collision with an animal so it would have been a comprehensive loss. Otherwise, it's collision no matter what she struck. Either way the damage to the vehicle is covered (as long as the policy contains comprehensive and collision coverage), it's just obtaining coverage from different portions of the policy

Posted: Sun Sep 09, 2007 04:22 pm Post Subject:

I'm not going to argue- or split hairs- that's what I said/meant about my aunt.

It was covered, but not comprehensive- on collision..KAren

Posted: Wed Sep 30, 2009 03:06 pm Post Subject: Collision Insurance

WHAT IS THE % OF US DRIVES WITHOUT COLLISION INSURANCE?

Posted: Tue Dec 22, 2009 10:29 am Post Subject: collision on my vehicle

driving in the USA a vehicle turn left in front of me the police have charged the other driver which is registered in the USA my car British Columbia. the USA car was not insured will my collision coverage look after my vehicle for repairs.