Collision Insurance Definition

Collision insurance coverage is an insurance plan that covers your insured motor vehicle against any kind of physical damage to your car. The physical damage that the insured car sustains may occur when; it is hit by another vehicle, it hits another vehicle or when it is hit by an object. Most collision insurance plans also cover the physical damage that the insured car sustains when it accidentally rolls or flips.

The property damage liability insurance plan only covers the cars you might hit. They do not cover any physical damage that your car may sustain in the process. For you to cover against damages to your car, you need the collision insurance plan. With the collision coverage, insured individuals can claim payment from the insurance company for most damages sustained in most car accidents, that is, minus the deductible amount. Collision covers pay regardless of whether the other person was not insured, underinsured or even unknown. Additionally, this plan covers your vehicle against damage even if you were the one at fault in the accident.

However, the collision coverage still does not cover any and all physical damages that your car may sustain. In order to have full coverage, you will need a comprehensive insurance policy. The comprehensive policy covers your vehicle against theft, vandalism, fire, floods, and animals. If you are looking for insurance for your car, you should remember that the comprehensive and collision insurance plans do not cover every issue that may lead to the damage or loss of your car. For example, these plans do not cover damages brought about by wear and tear. Additionally, damages caused by natural phenomena such as freezing and car breakdowns are also not covered in these policies. Actually, there are no insurance policies that cover such claims. In order to get a collision coverage, the insurance company will require you to choose a deductible amount. The deductible amount is simply the percentage of the claim that you are required to cover before your insurance can step in to pay the rest.

Collision is not a mandatory requirement by any state. Property damage liability is a requirement in most states since your insurer will cover most of the damages in case you were at fault in an auto accident that caused physical damage to other people’s property. States do not require individuals to pay insurance for fixing their own vehicles. Nevertheless, if you have a lease or a loan on your vehicle, the lender almost always requires a collision coverage. In addition, the lender may even select the deductible amount that you will choose in that plan.

Most collision insurance plans do not come with a limit. Most of these coverage pay the actual value of the car after they subtract the deductible. If your car is declared totaled during an accident, experts recommend that you pay a $500 deductible unless you have enough personal savings. In general terms, the higher the deductible amount, the less expensive the premium is and the lower the deductible amount, the more the collision premium.