Collision Insurance Coverage

If you have no collision coverage, then you will be responsible for paying to repair or replace your car after an accident that you cause. When you're at fault in an accident, your liability insurance will only cover the other driver's expenses, not yours. Collision insurance is not usually needed if the other driver is at fault, since their liability insurance will pay for damage to your car.

Collision insurance can sometimes be helpful after accidents when fault isn't clear. If you have collision insurance, you can file a claim with your own insurance company while you wait for the insurance adjuster to make an official judgement of fault. Then, if the other driver is determined to be at fault, their insurer will reimburse yours.

Not having collision coverage can also make a claim difficult if you're hit by an uninsured or unidentified driver. Unless you carry uninsured/underinsured motorist coverage, your only option is to sue an uninsured driver. Still, you're unlikely to collect anything if you win, as a driver without car insurance is more likely to be unable to pay damages. And some states don't allow you to use uninsured/underinsured motorist coverage after a hit and run, which means you'll have to pay for the damage yourself.

It's generally a good idea to carry collision insurance if you can't afford to pay out of pocket for repairing or replacing your car. On the other hand, if you have the financial resources to repair or replace your car, you can usually consider dropping collision coverage if the cost exceeds 10% of your vehicle's value.

If you total your car with no collision insurance, then your insurance will not reimburse you for the value of your vehicle. Collision insurance pays to repair or replace your car after an accident, so without it, you might have to pay out of pocket to replace the car.

If the accident is your fault and you don't have collision insurance, your best option is to sell the car in its current state. You will still be able to recover something through the salvage value, which is the amount of money that a salvage yard will pay for the parts and frame.

On the other hand, if the accident is not your fault, then the at-fault driver's property damage liability insurance will cover the cost of your loss, up to their policy limits. In this case, you will still be reimbursed for the value of your car even if you don't have collision insurance. However, if your car's value exceeds the at-fault driver's liability limits, you will have to file a claim using uninsured/underinsured motorist coverage, file a lawsuit against the driver, or cover the remaining costs yourself.

Collision insurance is not required by any state laws, but you will need to carry it if your car is leased or financed. In general, it's a good idea to carry collision insurance if you can't afford to replace your car and the annual cost of coverage is less than 10% of your vehicle's value.

Yes, you have to have comprehensive and collision coverage on a financed car. Most reputable lenders require comprehensive and collision insurance on financed cars to protect their investment if the car is damaged, stolen or totaled.

Comprehensive insurance pays for repairs or replacement if a car is damaged due to something besides a crash, such as theft, vandalism, or natural disasters. Collision coverage, on the other hand, pays to repair or replace a car that is harmed in an accident. Unlike liability insurance, comprehensive and collision are not required by any state laws.

When purchased in addition to the state minimum coverage, comprehensive and collision are usually referred to as full coverage. Full coverage insurance is generally more expensive than just purchasing the state minimum coverage, but you can save by shopping around for quotes and checking out WalletHub's guides to cheap car insurance and car insurance discounts.

The rule of thumb for dropping collision insurance is to drop it when a car's collision premium, plus the deductible, costs more than 10% of the car's current value. Some experts also advise dropping collision insurance when the vehicle is more than 10 years old. Since the average driver gets into an accident once every 10 years, these rules exist to keep drivers from paying more for insurance over time than they would get from filing a claim.

However, you should think of these rules as loose guidelines while also taking your individual circumstances into account. For instance, if you cannot afford to replace your car and you need it for transportation, dropping collision insurance could leave you stranded or in debt. Similarly, if you have a history of at-fault accidents, or a teenager is learning to drive using your car, you are particularly likely to need collision insurance. And to calculate your car's value, it's important to use a tool like Edmunds or Kelley Blue Book instead of the car's price when you bought it.

Additionally, not everyone is allowed to drop collision insurance. It's required for most financed or leased cars, since lenders and lessors want to make sure the car retains its value as collateral. In fact, if you drop required coverage on a financed car, you could end up paying for expensive force-placed insurance or even having the car repossessed.

An older rule recommended that drivers drop collision coverage on a six-year-old car or a car with 100,000 miles, but this is slightly outdated advice given the cost of car repairs today. A more expensive car might be worth plenty even after five years, or a car with 100,000 miles might be too costly for you to repair or replace with your savings. That's why it's important to consider your own financial circumstances before deciding whether or not to drop collision insurance.

The difference between full coverage and the combination of comprehensive and collision insurance is the addition of state-mandated liability insurance and, in some cases, coverage for a driver's medical care. Full coverage is generally defined as comprehensive and collision insurance plus a state's minimum car insurance coverage.

While comprehensive and collision coverage are not required by state laws, they are usually required on a leased or financed vehicle. Collision coverage pays for damage to the policyholder's vehicle from an accident, regardless of fault. Comprehensive insurance, which is sometimes considered “bad luck” insurance, covers events outside of a driver's control, like natural disasters and damage from animals. Because “full coverage” implies that everything is protected, comprehensive and collision are usually considered part of it.

The last component of full coverage insurance is a state's minimum required insurance coverage. Almost every state requires liability insurance, which pays for damage the policyholder causes to other people and their property. In addition, some states require coverage that pays for the policyholder's injuries in the event of a crash.

Yes, you need collision insurance if your car is leased or financed. Collision insurance is not required by any state laws, but most lessors and lenders require drivers to have it until the car is paid off. Even if you're not required to have collision insurance, you should still purchase it if you cannot afford to pay for damage to your vehicle after an accident.

Collision insurance pays to repair or replace your car after an accident, regardless of who is at fault. If you cause an accident, collision coverage is the only way to have your repair costs covered by insurance. Even if you are not at fault for an accident, you can file a collision claim to pay for your repairs while you wait for a final determination of fault. Your insurance company will then recoup your costs from the other driver's liability insurance.

A general rule of thumb is that if your collision insurance premium is more than 10% of your car's value, you can consider dropping the coverage. However, this is just a general guideline. If you can't afford to pay out of pocket to repair or replace your car after an accident, then you should continue to carry collision insurance. You should also keep it if your car is particularly valuable or you live in a high-traffic area where you are more likely to get into an accident.

If you don't have collision insurance and someone hits you, their liability insurance will cover your expenses. Collision insurance could still be helpful if someone hits you and the cost to repair or replace your vehicle exceeds the limits of that person's liability policy. And if the other driver is uninsured or unidentified, collision insurance is one way to avoid paying out of pocket for repairs.

You can use uninsured/underinsured motorist coverage to pay for repairs if you don't have collision insurance and you're hit by an uninsured or underinsured driver. Most states will also allow you to use uninsured/motorist insurance to repair your car if you're the victim of a hit and run. However, some states – like California and Illinois – do not allow this if the driver is unidentified. If you're hit by an unidentified, uninsured, or underinsured driver and do not have collision or uninsured/underinsured motorist coverage, you will have to pay for any repairs yourself.  

Finally, if you're hit by another driver and you don't have collision insurance, it's important that you document the accident as much as possible in order to file a successful liability claim. In addition to collecting the at-fault driver's insurance information, you should take pictures of the damage and the scene of the accident. You should also file a police report and notify your insurance company about the accident.

If your car is hit by another car in a parking lot, it is covered by collision insurance, not comprehensive insurance. But if the at-fault driver is identified and has insurance, their liability coverage should pay to repair or replace your vehicle, so you won't need to file a collision claim.

Comprehensive insurance covers events other than a car crash, such as theft, natural disasters, and vandalism. So if your car is hit by a golf ball or a shopping cart in a parking lot, comprehensive will pay for the damage. Similarly, vandalism to a car in a parking lot will be covered by comprehensive insurance. But anything involving two cars will be covered by collision insurance.

You need collision insurance on an old car if the car is financed or leased. You should also keep collision insurance on an old car if you cannot afford to pay out of pocket to repair or replace the car after an accident.

A general rule of thumb is that you can think about dropping collision insurance if the premium exceeds 10% of your car's value, so it's possible that collision coverage might not be worth it on an old car that isn't worth much. But you should only consider this rule in the context of your own circumstances. If you depend on your car for everyday use and can't afford to pay for repairs, collision insurance could keep you out of a difficult situation if your vehicle is damaged in an accident.

To learn more about customizing your coverage, check out WalletHub's guide to deciding how much car insurance you need. 

A collision insurance deductible is the amount of money that a driver must pay out-of-pocket when filing a collision insurance claim. Collision insurance pays to repair or replace a car damaged in an accident, and a driver must pay their collision deductible before their insurance company will cover the remaining costs.

For example, say you are at-fault in an accident that causes $10,000 in damage and you have a $1,000 deductible. You have to pay $1,000 out-of-pocket in order for your insurance company to pay the remaining $9,000.

Collision deductibles typically range from $100 to $1,000, and you select your deductible amount when you purchase your policy. The higher your deductible, the cheaper your premium will be. Although it's tempting to get a higher deductible in order to pay less upfront, you should only choose a deductible that you can afford to pay if your car is suddenly damaged in an accident.