What Will Collision Insurance Cover in the Event of an Accident?

Collision insurance is a component of an auto insurance policy designed to protect your own vehicle from damage resulting from certain types of accidents. It serves as a financial safeguard, helping to cover repair or replacement costs for your car. This coverage applies specifically to physical damage your vehicle sustains, rather than damage to other vehicles or property, or injuries to individuals.

Situations and Damages Covered

Collision insurance provides coverage for damage to your vehicle when it collides with another car, an object, or rolls over. This coverage applies regardless of who is at fault for the accident, offering protection for your vehicle in various impact scenarios. For example, if you are involved in a multi-vehicle accident, collision coverage can help pay for the repairs to your car.

The coverage also extends to single-car accidents, such as hitting a stationary object like a tree, fence, pole, or guardrail. Damage caused by potholes, if it leads to a collision-type event, can be covered under this policy.

When your vehicle sustains covered damage, the payout from collision insurance is typically based on the vehicle’s actual cash value (ACV). Actual cash value represents the car’s market value at the time of the accident, taking depreciation into account. This differs from replacement cost, which would cover the cost to purchase a new, comparable vehicle without factoring in depreciation. Insurance companies determine ACV using factors such as mileage, wear and tear, and the vehicle’s overall condition.

Common Exclusions from Collision Coverage

While collision insurance covers damage to your vehicle from impacts, it does not cover all types of damage or losses. Damage not caused by a collision, such as fire, theft, vandalism, or natural disasters like hail, floods, or falling objects, are typically excluded. These types of non-collision damages are generally covered by comprehensive insurance, a separate component of an auto policy.

Collision coverage also does not pay for damage to other people’s property or medical expenses for injuries to others involved in an accident. Liability insurance is the coverage responsible for these costs. Similarly, medical expenses for the insured or passengers are covered by medical payments coverage or personal injury protection (PIP), not by collision insurance.

Other common exclusions include damage from hitting an animal, which falls under comprehensive coverage, and general wear and tear or mechanical breakdowns. Damage sustained from intentional acts, illegal activities, or racing are also typically not covered. Furthermore, personal belongings inside the vehicle that are damaged or stolen are usually excluded from auto insurance policies, but may be covered by homeowners or renters insurance.

Navigating Your Collision Claim

When filing a collision claim, the deductible plays a significant role. A deductible is the amount you agree to pay out of pocket before your insurance coverage begins to pay for the remaining costs. Common collision deductibles typically range from $250 to $1,000, though they can vary from $100 to $2,000. Choosing a higher deductible often results in lower insurance premiums, but requires a larger out-of-pocket payment.

The process generally involves reporting the accident to your insurer, which can often be done online or via a mobile app, and providing details and supporting documentation such as photos of the damage. An insurance adjuster will then assess the damage to your vehicle. Based on this assessment, the insurer will determine whether the vehicle can be repaired or if it is considered a total loss.

If the vehicle is deemed a total loss, meaning the repair costs exceed a certain percentage of its actual cash value, the insurer will pay out the vehicle’s ACV, minus your deductible. If the vehicle is repairable, the insurer will cover the cost of repairs beyond your deductible, often with options for approved repair shops.