Choosing the proper car insurance is always more complicated than it should be. Whether you are looking at insurance companies online or talking with a broker, it seems as though you have a lot of different options, from comprehensive coverage to liability coverage, and everything in between. Among your options, you will no doubt come across collision coverage.
This option may not cost as much per month as comprehensive coverage, but it will always come with a higher price tag than insurance plans that do not include collision coverage. But what is it? And why does it cost more? After all, isn’t the point of insurance to cover most or all of your costs when you have a collision with another vehicle? To understand this auto insurance option, we must first clearly define collision coverage.
Collision Coverage Defined
So what exactly is collision coverage? Basically, this coverage option insures your vehicle in the case that you have a collision with another vehicle or some other object. For example, if you opt for collision coverage, you can get your insurance company to pay for the damages if you hit a tree, a wall, a fence, or some other object, even if you are at fault.
If you’re like a lot of car owners, you’re probably thinking that this sounds like comprehensive coverage. However, there is one major difference between collision coverage and comprehensive coverage. Collision coverage will not cover other damage to your vehicle that happens for reasons other than a collision. If, for example, your vehicle is damaged in a storm, collision coverage will not take care of the costs to repair hail damage or damage from tree limbs falling in your vehicle, but comprehensive coverage will.
This explains why collision coverage is generally a bit more affordable than comprehensive coverage. It also explains why someone with a brand new car or someone who lives in an area where their vehicle is likely to get damaged while parked would opt for comprehensive coverage over collision coverage.
So, what’s the right level of coverage for your vehicle? Should you opt for collision coverage to protect your vehicle in case of a collision with a fence or a tree? Let’s take a moment to consider what collision insurance actually covers.
What Does Collision Insurance Cover?
Collision coverage will pay for damage to your vehicle if you are in an accident that is your fault, or if you have a collision with something else. If you are at fault in an accident, your collision coverage will not cover the damage to the other vehicle or any other property. Your liability insurance will cover those damages, and your collision coverage will cover the damage to your own vehicle.
Why Get Collision Coverage?
Collision coverage makes sense if you have a newer vehicle or a higher-end vehicle that is expensive to repair. In many cases, with newer or more expensive cars and trucks, your monthly premium and deductible will essentially pay for themselves if you are ever in an accident where you will be responsible for paying for the damage to your vehicle.
If you have an older vehicle, you may still want to opt for collision coverage, as it will ensure that you can get your vehicle repaired if you’re at fault in an accident. Your driving record and the claims you’ve filed in the past with your insurance company will affect your monthly premiums and your deductible, though, so you should consider how much you will be paying per month for collision coverage and how much it could save you in case of an accident before you commit to this option.