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Search by Quote ID → Search by Date of BirthWhat is Collision Insurance?
Collision insurance is a type of car insurance coverage that helps pay for the cost of repairing or replacing your vehicle if it’s damaged in an accident, regardless of fault. These types of incidents include:
- A collision with another vehicle
- A collision with a stationary object like a guardrail or pole
- A rollover accident
- A hit-and-run
Collision Coverage Regardless of Fault
Collision coverage protects a vehicle when it’s involved in an accident, whether it be a rollover, hit-and-run, collision with another vehicle, or an encounter with a fixed object like a pothole, guardrail, or light post. Collision coverage applies only to your vehicle, it doesn’t cover whatever your vehicle collided with. That damage would be covered under property damage liability coverage if you were found legally responsible for the accident. Your insurance company will assess the damages to your car and pay for the repairs. All you’ll owe is the deductible.
A deductible is the out-of-pocket expense you agree to pay per loss before any payment from the insurance company is distributed. Deductibles range from $0 - $2,000, but limits of $250, $500, or $1,000 are most common. So, if you have a $500 deductible and the estimated cost of repairs to your vehicle totals $2,000, you would owe $500 to the repair facility before your insurance will send the remaining $1,500 their way. Generally, the rule of thumb is that the higher the deductible, the lower the corresponding coverage premium.
Do I Need Collision Insurance?
Although collision auto coverage is not required by any state, your lending institution may require it if you are financing your auto. If your vehicle is involved in an accident and considered “totaled” (when the collision repair costs exceed a certain threshold of the vehicle’s value), you and your lending institution would be protected up to the actual cash value (ACV) or “fair market value” of the vehicle. Your deductible will still apply in a total loss scenario.
Depending on the terms of your loan, it’s possible that the vehicle will depreciate more quickly than the value of your loan. To avoid paying the difference to the lender out of pocket, you can purchase gap insurance, which typically covers the difference between a vehicle’s actual cash value and the sum owed to the lender.
Learn more about coverage details and call (833) 910-3910 for a free auto insurance quote from Mercury.
Frequently Asked Questions
What is collision insurance on a car?
Collision insurance helps pay for repairs or a replacement if your car is damaged in an accident, no matter who’s at fault.
What does collision insurance cover?
Collision insurance covers damage to your vehicle resulting from:
- Accidents involving another car
- Hitting objects like guardrails, poles, or potholes
- Single-vehicle rollovers
- Damage from hit-and-run incidents
What is a collision deductible?
A deductible is the amount you pay out of pocket before your insurance kicks in. For example, if you have a $500 deductible and your car needs $2,000 in repairs, you’d pay the first $500, and your insurance would cover the remaining $1,500.
How do I file a collision claim?
To file a collision insurance claim:
- Report the accident to your insurance provider as soon as possible.
- Provide details about the incident, including photos and witness statements if available.
- Get a vehicle damage assessment through your insurer’s claims process.
- Pay your deductible, and your insurer will cover the remaining repair costs up to the policy limits.
Is collision insurance required by law?
No, collision insurance is not legally required in any state. However, if you finance or lease your vehicle, your lender may require you to carry this coverage until the loan is paid off.
What is a no-contact collision?
A no-contact collision happens when a driver crashes while trying to avoid another vehicle without actually making physical contact. For example, swerving to avoid a reckless driver and hitting a guardrail would be considered a no-contact collision.