Everything You Need to Know About Collision Insurance

Last updated March 28, 2022

As a driver, it’s essential to know about your options for car insurance, including your state’s requirements and additional coverage types. Right now, collision insurance is optional in all states. However, there are benefits to adding it to your policy.

But what does collision insurance cover? How much does it cost? And is it worth it? Find answers to all these questions and more, so you can make an informed decision about whether or not to purchase collision insurance.

What Is Collision Insurance?

When you’re driving, the last thing you want to happen is a collision. But if it happens, you’ll want to be prepared. That’s where collision insurance comes in. Collision insurance helps protect you financially in the event that you’re involved in an accident with another vehicle or an object.

If your car is damaged from an at-fault or no-fault accident, or if you collide with a tree, building, guardrail, person, etc., this type of insurance provides financial assistance to repair or replace your car.

What Does Collision Insurance Cover?

If you’re ever in an accident – whether with another vehicle, object, or person – you can rest assured that your car will be repaired or replaced if you have collision insurance. Specifically, collision insurance coverage provides financial assistance to cover the costs of repairs if your vehicle is damaged from:

Colliding with another vehicle, regardless of who is at fault for the accident
Colliding with an object, such as a guardrail, fence, or sign
Colliding with a person
Rolling or falling over as a result of a single-car accident

It’s important to note that collision coverage does not pay for damages from hitting an animal such as a deer; this type of incident is covered by comprehensive coverage. Collision insurance also doesn’t cover damage to another person’s vehicle or any medical bills. Damage to another person’s property or costs associated with their injuries are covered by your liability insurance, while costs associated with your own medical bills are covered by personal injury protection or medical payments coverage.

Types of Collision Insurance

There is only one type of collision insurance in all states except Michigan. Collision insurance typically covers the cost to repair or replace your vehicle after an accident once you pay a deductible. Most insurance providers offer several deductible amounts–ranging from $0 to $1,000. Your deductible must be paid out-of-pocket for your collision insurance to cover the rest of the cost of damages.

In Michigan, there are three types of collision coverage: limited, standard, and broad form.

Limited Collision Coverage (in MI only):

If you’re more than 50% at fault = Insurance pays nothing
If you’re less than 50% at fault = Insurance pays over the cost of your deductible.

Standard Collision Coverage (in MI only):

If you’re more than 50% at fault = Insurance pays over the cost of your deductible
If you’re less than 50% at fault = Insurance pays over the cost of your deductible

Broad Form Collision Coverage (in MI only):

If you’re more than 50% at fault = Insurance pays over the cost of your deductible
If you’re less than 50% at fault = Insurance pays for everything (no deductible)

Do I Need Collision Insurance?

Currently, collision insurance is optional in all states. However, if you lease or finance your vehicle, your lender may require you to hold collision coverage until you pay off your loan.

Additionally, while drivers do not need collision insurance to operate a vehicle legally, many choose to add this coverage type to their policy for additional protection. When deciding whether or not to purchase collision insurance, consider the price of your vehicle and how much it would cost to repair or replace it out of pocket if you were ever in an accident. If that price is too high for you to afford, collision insurance may provide some financial peace of mind.

Find Affordable Collision Insurance

If you decide that purchasing collision insurance makes sense for you, it’s time to find the right provider for the best coverage and price. By understanding what collision insurance covers and what type of policy is right for you, you can save money on your premiums without sacrificing protection in the event of a crash. Because insurance can be expensive, it’s important to shop around and compare quotes to find the best price for this type of coverage.

Use our fast, easy, and free tools to find the best collision insurance from top companies. Submit your information and start comparing car insurance quotes today!

About Rate Retriever

At Rate Retriever, our mission is to make the way you shop for insurance transparent and fair through user-friendly tools that respect your privacy and deliver reliable, comprehensive results.

So we took everything we hated about comparing insurance quotes online – the spam, the long questionnaires, the limited choices, the inaccuracy of quote prices – and threw it out the window, favoring a short form that more accurately estimates what you’ll pay at each of the top insurance providers near you.

Rate Retriever is an independent company that is not owned by an insurance provider, nor do we provide insurance ourselves. This independence allows us to be your free and impartial insurance research tool, helping you make the best decisions for your insurance needs.

We may earn a commission when you click one of the links or call one of the providers listed on our site; however, we do not allow our partnerships to influence which information we provide.

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