What Is Collision Coverage in Personal Injury and Insurance Law?
Collision coverage is a type of auto insurance that pays for the repair or replacement of your vehicle if it is damaged in a collision, regardless of who was at fault. It is typically an optional coverage included in a full coverage auto insurance policy but may be required if you are financing or leasing your vehicle. Collision coverage only applies to vehicle damage and does not cover injuries or damage to another person’s property.
What Does Collision Coverage Include?
Collision coverage generally pays for damage resulting from:
- Collisions with Another Vehicle: Covers repairs if you hit another car, regardless of fault.
- Single-Car Accidents: Includes incidents like hitting a tree, fence, or other stationary objects.
- Rollovers: Provides coverage if your vehicle flips over due to an accident.
- Hit-and-Run Accidents: Covers your vehicle's damage if the other driver cannot be identified.
What Collision Coverage Does Not Cover:
- Injuries: Medical expenses are covered by personal injury protection (PIP) or medical payments coverage (MedPay), not collision coverage.
- Damage to Another Vehicle or Property: Covered by liability insurance if you are at fault.
- Non-Collision Events: Issues like theft, vandalism, or natural disasters are covered under comprehensive coverage, not collision coverage.
Why Is Collision Coverage Significant?
Collision coverage is important because it ensures you can repair or replace your vehicle quickly after an accident, regardless of who caused the collision. Its significance includes:
- Peace of Mind: Helps protect against unexpected repair costs.
- Required by Lenders: If you finance or lease your car, lenders typically require collision coverage.
- Fault Does Not Matter: Covers your car even if you were at fault or if the other party lacks insurance.
- Protects Your Investment: Ensures your vehicle is repaired or replaced without dipping into personal savings.
How Collision Coverage Works:
- Deductible: When filing a claim, you pay a deductible, which is the amount you agree to pay out of pocket before the insurance covers the rest. Common deductibles range from $500 to $1,000.
- Claim Payout: The insurer pays the cost of repairs or the market value of your vehicle if it is totaled, minus your deductible.
Should You Have Collision Coverage?
Collision coverage is recommended for vehicles with significant value, especially newer or financed cars. For older vehicles with low market value, the cost of coverage might outweigh the benefits.
If you are involved in a collision, understanding your coverage and rights can help you recover repair costs efficiently. Consulting with an attorney can also ensure fair treatment from your insurance provider in case of disputes.
