What is collision coverage?
Collision covers your car for collisions. Like you rear-end someone, slide into a tree, or run into a fence. If you accidentally hit another car or object or another car accidentally runs into you, your car's covered by collision.
What you should know
If your vehicle's leased or financed, you'll need to have collision coverage. But more importantly, you'll want to have it to make sure your vehicle's well protected.
In most states, you need to have comprehensive coverage to get collision.
If you have more than one vehicle on your policy, you can choose to add collision for each vehicle separately.
Collision has a deductible
When it comes to collision coverage, a deductible will apply to each accident. That means if you need to use it, you'll need to pay that deductible. Here's how it works.
- Your car's banged up in accident and repairs will cost $7,000
- You pay your deductible — say it's $500 — and then your insurance company covers the remaining $6,500 for all repairs
Think about deductibles this way. If you needed to file a claim tomorrow, how much could you afford to pay without stressing your finances? Keep your deductible close to, but below, that amount.
Does it matter who's at fault?
Nope. Collision covers your car for collisions regardless of who's at fault.
Does collision or comprehensive cover that? A list of uh-oh scenarios.
To paint a more vivid picture, here are some real life scenarios and the coverage that could come to the rescue for each.
So if ...
- A shopping cart collides with your passenger door. → Comprehensive.
- A tree falls and smashes through the hood of your car. → Comprehensive.
- Your vehicle is stolen. → Comprehensive.
- Someone sets fire to your car during a riot. YIKES! → Yup. Comprehensive could cover that too.
But if you ...
- Rear-end someone. → Collision.
- Drive through a fence. → Collision.
- Hit a median. → Collision.
- Hit a deer. → Comprehensive! Okay, that was a trick (sorry). Just keeping you on your toes. This is one "crash" that comprehensive covers.
Which should you get?
Both are GREAT to have. Especially if you drive a lot.
Are comprehensive and collision required?
Comprehensive and collision aren't required in any state. But if you're leasing or financing your car your lender will more than likely require you to purchase comprehensive and collision.
Collision deductible waivers
A collision deductible waiver can pay your deductible if you're hit by an uninsured driver. In some states you're required to have this with your collision coverage. Not sure if you need it? Ask your insurer. They'll know whether or not it needs to be added on if you purchase comp and collision coverage.
How to save on comprehensive and collision coverage
While adding comp and collision to your policy will cost more upfront — it could save you thousands upon THOUSANDS of dollars after a mishap.
That said, there are ways to save on comprehensive and collision coverage. Here are a few.
Install anti-theft devices
Depending on your state, things like LoJack®, OnStar®, and Teletrac could earn you an Anti-Theft discount. We're talking anywhere between 5 and 25% off your comprehensive coverage. Plus, these devices are just good to have.
Increase your deductible
As mentioned above, higher deductibles typically lower your premium. The more you're willing to pay out of pocket, the more risk you're taking on yourself. Just be careful. In order for coverage to kick in, your deductible needs to be met. Not being able to meet it could significantly delay your claim.
Also, a car insurance deductible doesn't work the same way as health insurance. With a health insurance plan, you pay a single deductible off with multiple claims (i.e. doctor appointments). With auto insurance, you don't. Instead, each auto claim has the same deductible each time. So if your chosen deductible's $1,000 you'd need to pay that for each claim.
Try alternative means of transportation
The more you drive, the greater your risk. The greater your risk (generally speaking), the higher your car insurance rate.
On the flipside, the less you drive, the lower your risk. And the lower your risk ... well, you get it. Biking. Bussing. Taking the train. Carpooling. These are all great ways to cut back on the ol' odometer ... and lower your car insurance premium.
Comprehensive and collision for rental cars
Rental car places often try to get you to buy extra rental car protection from them. Truth is, you might already have rental car coverage.
A regular car insurance policy usually covers rental cars the same way it covers your own. That includes comp and collision if you have it. If it's a business rental, though, it might not. Just check with your insurer so you know for sure which coverages apply to your rental.
Also, if you're paying with a credit card, check with your credit card company. You might already have comp and collision with them as well.