What Is Collision Insurance And Do You Need It?

By Jason Metz, Forbes Advisor

Sometimes those inanimate objects seem to jump out of nowhere when you’re driving. An estimated 14% of car accidents are collisions with fixed objects, like a post, pole, curb, tree or guard rail, according to the National Highway Traffic Safety Administration. And even a minor accident can cost thousands of dollars to fix. 

Collision insurance covers your vehicle repair bills, no matter who is at fault for the accident. It’s an optional coverage type, meaning you need to pay extra for it. And while a car insurance claim for a car accident isn’t fun, the best car insurance companies have strong customer service and a good reputation with auto body repair professionals to help get you back on the road as quickly as possible. 

What Does Collision Insurance Cover?

Here are some examples of when you can make a collision insurance claim:

  • You crash into another car.
  • You crash into a guardrail or other object.
  • You accidentally back into a pole.
  • Another car crashes into your car (including hit and runs). 
  • Your car slides on ice and hits a telephone pole. 
  • You lose control of your car and it rolls over. 

What Is Not Covered by Collision Insurance?

Some examples of problems not covered by collision insurance are:

  • Damage to another person’s car.
  • Your medical bills are due to a crash.
  • Damage to your car for problems like car theft, vandalism, fires, floods, hail, falling objects and collisions with animals.

For these types of problems, you need other coverage types, such as liability insurance, personal injury protection or MedPay, or comprehensive insurance. 

How Does Collision Insurance Work?

If your vehicle is damaged by a problem covered by collision insurance, you can file a claim. You’re responsible for your insurance deductible, which is the amount deducted from your insurance check. 

For example, if you get into an accident causing $2,000 worth of damage to your car and have a $500 deductible, you will get an insurance check for $1,500. 

Collision insurance is generally sold as a package with comprehensive insurance. Together, these two coverage types pay for vehicle repairs for a wide variety of problems.

How Much Does Collision Insurance Cost?

The average national cost for collision insurance is $381 per year, according to the  National Association of Insurance Commissioners. 

Collision insurance costs vary based on several factors, including:

  • The model of the car, including how expensive it is to fix 
  • Your driving record
  • Your claims history
  • Where you live

Do You Need Collision Insurance?

Collision insurance isn’t required in any state, but you’re likely required to carry it if you have a car loan or lease. That’s because your lender or leasing company doesn’t want you to walk away from your financial obligation if your vehicle gets totalled in a car accident. 

Even if you’re not required to have collision insurance, it’s good coverage to have if you want insurance money to pay for car repair bills after a car accident. 

Some car owners don’t carry collision insurance for older vehicles. That’s because the maximum payout (the value of your car minus the deductible) will be low and not worth the cost of collision insurance over time.

But that might not be the best choice for you. Ask yourself: If you get into a car accident, how would you pay to repair or replace your car? If you can’t afford to fix your car or pay toward a replacement, collision insurance might give you some peace of mind. 

Remember that if someone else is to blame for crashing into you, you can generally make a claim against their insurance for your vehicle damage.

How to Save Money on Collision Insurance

Not all car insurance companies price collision insurance the same. It’s wise to get car insurance quotes from multiple insurance companies and compare the total price for liability, collision, comprehensive and other coverage types you want.

Too many drivers neglect this simple step. Only about one-third (34%) of drivers got an insurance quote from a different company within the last year, according to a YouGov survey for Forbes Advisor. 

But with a minimal time investment, you may be able to save on your car insurance. You can get free car insurance quotes online or by speaking with an insurance agent.

Photo by Anders Nord on Unsplash