Collision Insurance: What it covers, How much it cost?

By Randy Luton | Last Updated: 04/06/2023

Key Insights

  • Collision car insurance is not a mandatory requirement for any state but it is recommended to the drivers.
  • It provides protection in case your vehicle collides with another vehicle or a living as well as a nonliving object.
  • It does not cover damages caused by natural or man-made calamities like thunderstorms or vandalism.
  • Anyone can buy collision insurance but it is not recommended or required for everyone.
  • It is better to check the actual cash value of your vehicle and compare it with the premium before buying this policy.

Are you searching for Collision insurance because you want to upgrade your policy? OR Are you want to cancel your policy to save some money? In any case, this blog is going to be your guide.

How many times you have imagined getting hit by truck and rolling over on the highway? Or hitting that huge tree on your way to the office. Ever wondered how expensive will be the repair or replacement cost of the vehicle in such cases? Yes, the repair cost can exceed $3000 depending on the type of car you were driving.

The best way to protect your money from this expense is to get cheap collision car insurance. The confusion around collision, comprehensive and full coverage insurance is never-ending. Drivers still get difficult which one to buy and which one is necessary for them.

Hence we tried to cover everything you need to know about collision auto insurance to help you make a smart decision in this guide.

What is collision insurance coverage?

Collision car insurance is to cover all your repairs or replace your car in case of accident damage.

If your car hits another car or object then the cost of repairing or replacing the vehicle will be covered by the insurance company. Collision car insurance is optional; we all know that. But it can save a lot of your money in some cases.

Especially if you share your vehicle with a young driver. The medical expenses after a collision can be high for the driver and the passengers. And then the cost of vehicle repair or replacement adds another level of stress. The extra coverage from a collision will protect you from that stress.

What does collision auto insurance cover?

If you get into an accident where the other person was at fault then they will cover all the repair expenses. This is called property damage liability that is compulsory for every state except New Hampshire. The problem here is; most of the states have a very low limit for property damage liability like $5000 or $8000.

If your car gets totalled or needs huge repairs then who will pay the rest of the claim?

If you have collision insurance then your insurance company will pay the rest of the amount. You will have to just inform your insurance company and they will connect with the other person’s insurance company and deal with the claim.

But, what if you did not have collision auto insurance? In that case, you will just get the claim amount that is the minimum limit in that state. The rest of the expense will be from your pocket.

  • If you get into a single-car accident that involves only your car
  • If you get into an accident with another car or any other vehicle
  • In case your car gets into a collision with a non living object like a wall or bench or
  • If your car collides with any obstruction in the road
  • If you roll your car in an accident

Related Read > What to do after a car accident ?

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What does collision insurance not cover?

It seems like collision car insurance covering everything you need. But that is not true. There are a lot of scenarios that you are missing out on here. When we look at the coverage in detail we realize some common everyday situations are not covered. And for that, you will have to expand your insurance coverage.

Let’s have a look at what is not covered in collision car insurance.

  • Hitting or being hit by an animal
  • Someone steals your car
  • Your car getting caught in hailstorms, flood, or fire
  • If some falling or flying objects damages your car
  • Your car becomes a target in vandalism
  • If the car gets caught in natural disasters like earthquake or tsunami

How much is collision car insurance?

And here is the most essential part of our guide; the cost of collision coverage. Let’s understand;

The average cost of collision car insurance is $573 per year across United States. It can vary a lot for different companies and states. Each company has its method of calculating the car insurance cost for their drivers. Plus every state have its own rules and regulations and limits.

As a result; the cost of collision insurance in Iowa can be around $350 while it can rise to $690 for California. Make sure to check the average rate in your state.

Moreover; there are also some other factors that affect car insurance costs for every driver. These factors include the age of the driver, experience of the road, maybe the gender of the driver, etc. Based on all these factors the cost of collision car insurance may vary for every driver in the same state as well.

Related Read > How to calculate your car insurance premium ?

How does the collision insurance deductible work?

Deductible amount plays a very important role in the car insurance rates for any driver. A deductible is a predefined amount that the driver decides to pay before filing any claim. This amount is subtracted from the claim amount of the driver.

  • Each company has its deductible policy and a driver can select the deductible amount between $500 and $1500.
  • The deductible amount can increase or decrease your insurance cost. The higher you keep your deductible amount the lower will be your insurance rates.
  • Deductibles play the role of insurance for the insurance companies. Most of the time drivers with higher deductible drivers more safely because they know the claim will be expensive to them.
  • Hence the chances of filing a claim reduce and the insurance companies earn more profit.
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Do you need collision insurance?

Let’s analyze who needs collision insurance. 

The first that you have to check before buying collision insurance is the actual cost value of your car. Every insurance company considers the ACV of a vehicle to calculate the claim value. If your car gets totaled in an accident then you will get the claim equivalent to the actual cost value of your car.

  • Let’s say you have an old hatchback and you know that the ACV of your car is not more than $1000. Then there is no point in investing a $1000 deductible for the collision auto insurance. 
  • Similarly, let’s say you have a Mercedes Benz and you know that the ACV of the car is more than $1500. In that case, it is safe to invest $1500 on collision insurance. So to decide if you need collision car insurance or not first check the market value of your car. 
  • Secondly, you have to check who else is going to drive the car and also your brown driving record. If you have a teen driver or a young driver sarong your car then it is advisable to get collision insurance. Extra coverage will save you from extra expenses. Moreover; if you too don’t have a clean driving record then also try to get car collision insurance.

Collision vs Full Coverage Insurance

This is one of the biggest confusion among the drivers; collision insurance is not the same as full coverage insurance.

  • Collision car insurance protects the driver from some extra expenses but still, it does not cover everything. While full coverage insurance covers the driver from almost all the possible scenarios.
  • Every state has its minimum coverage requirements that are compulsory for every driver. Even if you want to buy collision auto insurance or full coverage insurance; you will have to buy minimum coverage first.
  • Collision insurance provides coverage majorly from the accidents where you have collided with a living or nonliving object. It does not cover damages caused by natural calamities or theft. Full coverage insurance on the other hand is a combination of comprehensive and the collision car insurance.
  • Hence you will get coverage from accidents caused by sitting something or someone plus damages caused by natural calamities.
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Over To You!

Now that you know everything about collision insurance it’s time to make a decision. Do you think you really need the Collison insurance? If yes, have you compared the rates from different companies in your area? Also, don’t forget to ask for car insurance discounts.

Still, have doubts? Want to discuss collision insurance? RateForce has the experts for you. Call us today.

Editorial Guidelines: The above is meant as general information to help you understand the different aspects of auto insurance. This information does not refer to any specific auto insurance policy. Coverages and other features vary between insurers, vary by state, and are not available in all states. References to costs of coverages/repair, average or typical premiums, amounts of losses, deductibles, etc., are indicative and may not apply to your situation. We encourage you to speak to our insurance representative and to read your policy contract to fully understand your coverages.

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Randy Luton is the Founder and CEO of RateForce. He is passionate about InsurTech services and has in-depth knowledge about the auto insurance sector of the USA.