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What Is Collision Insurance? 

Collision coverage helps pay to repair or replace your vehicle after an accident, regardless of who is at fault. It is also not a required coverage under any state laws. While nearly every U.S. state has made liability auto insurance mandatory, no state law says that licensed motorists must have collision coverage as part of their plan. 

Carrying liability insurance is the legal minimum requirement, regardless of where you live. But while this option is cheaper than collision coverage, it does not provide first-party benefits in an at-fault state. And if you don’t get the right mix of coverage benefits, it can get very expensive if you get into an accident. 

The purpose of liability is to pay for the injuries and personal property losses of others if you’re involved in an accident that’s your fault. As for your own losses, you would not be covered at all. That’s where collision coverage comes in. 

Unpacking Collision Coverage: The Basics 

Collision auto insurance is pretty much what it sounds like. If you have this form of protection and get into a car accident, regardless of fault, your insurer will cover the financial losses by paying for repairs or replacing your totaled vehicle at the actual cash value (ACV). There is a deductible associated with collision that will be your responsibility. 

With collision, it doesn’t matter if you live in an at-fault state or a no-fault state. Your insurer will pay for your repairs or replacement, regardless of fault. On the other hand, if you only carry liability and you cause an accident, you’ll be responsible for all repairs to your own vehicle, as well as any costs to other parties over your policy limits. 

That’s why collision auto insurance is so important. 

Collision vs. Comprehensive: Understanding the Differences 

Collision and comprehensive are sort of like salt and pepper. You probably have more spices in your cupboard, but salt and pepper are your basics. Your starting point. The obvious kitchen choices. And you don’t have one without the other. 

Collision and comprehensive are the starting points of a financially protective policy. 

While collision covers costs associated with accidents, that’s not the only way your car can be damaged, totaled or lost. Far from it. 

What you need to know about comprehensive coverage is that it handles such calamities as a tree limb falling on your car during a windstorm. Or a highway collision with a deer or other wildlife. Or a fire that destroys your cars in the garage. Or your vehicle being vandalized, or stolen and never found. 

There’s a nearly endless list of calamities and catastrophes, incidents, and accidents that can damage, destroy, or take your car from you, even if you’re not behind the wheel at the time. It’s these non-road-accident claims that your insurance company will handle if you have comprehensive coverage. 

This is why collision and comprehensive go hand in hand. They’re two different items, but you need both to handle a variety of situations that might come your way. And for those who are financing or leasing their transportation, these two coverages will be required. 

Now back to collision. 

Why Collision Coverage Matters for Every Driver 

As mentioned, liability is the minimal level of coverage accepted in every state that makes auto insurance mandatory. (That’s every state except for New Hampshire and Virginia.) But liability only protects other drivers if you’re at fault for an auto accident. Collision protects you, regardless of fault. 

Imagine if your totaled vehicle is your only ride, and you need it to keep your job, run errands, pick up groceries, and take the kids to and from school. 

That threat to your finances is why collision is such a critical element of your policy. Yes, it costs more than liability-only coverage, but it is a form of auto insurance that covers so much more. And it doesn’t have to cost much more. 

Concerned woman sitting on the street after a car crash

Making Collision Insurance Affordable: Discounts and Savings 

There are various ways to keep the cost of a collision policy as low as possible. A smart money-saving strategy starts with your choice of auto insurance agent. Independent agents don’t work for just one insurer. They’ve contracted with multiple major brands, so they can go shopping for your collision coverage and bring back the most appropriate plan for the lowest possible cost. 

Your independent agent will know various other ways to cut costs. For instance, if you have a good driving record, you’ll pay much less than if you’ve had multiple moving violations or at-fault accidents. At-fault car accidents affect insurance premiums heavily. 

You can also save by bundling your policy. With this strategy, you can earn rate reductions by combining your car insurance with renters, homeowners, life, or other forms of coverage you already carry. Just like anything else you buy in volume, insurers will grant discounts when you get multiple lines of protection from them. 

A reliable and knowledgeable auto agent will also know ways of saving money for the young drivers in your family. Generally, drivers between the ages of 16 and 25 pay more for insurance because they’re part of an age group that tends to drive with less caution and is involved in more accidents than older drivers. 

But if your young driver gets good high school or college grades, some underwriters see this as a sign that they’re more responsible than their peers and will drive safer. Your agent can look for an insurer who’ll offer a discount for good grades and will help you find the right type of insurance for your high school or college student. 

These are just a few examples of ways a savvy, independent auto insurance agent can bring down the cost of an auto policy that includes collision coverage. 

Decoding Your Policy: Collision Coverage Limits and Deductibles 

One advantage of the way auto insurance rates are established is that there are a lot of decisions you can make to control your premium — the amount you pay for coverage. For one thing, you can choose limits and deductibles that meet your basic needs without exceeding what your budget will allow. 

Your coverage limits reflect the maximum amount your insurer will pay you for a claim. The limit of your collision coverage is the actual cash value (ACV) of your vehicle. Your agent can help you determine the amount of insurance you need based on what you drive, and shop for the most affordable policy. 

The deductible is the amount of money that you’ll pay on a covered claim before your insurer pays the rest (up to your coverage limit). For instance, if you carry a $500 deductible and have an accident causing $2,000 in covered claims, you’ll pay the $500 out of pocket, and your insurer will handle the remaining $1,500. 

The reason your deductible influences what you pay in premiums is because the higher your deductible, the less you’ll pay for your coverage. If you have a $1,000 deductible, you’ll pay less for your insurance than if you carry a $500 deductible because your insurer will have to pay less for a claim with the higher deductible. 

Once again, your insurer can help you balance the “pay now or (maybe) pay later” aspect of settling on a reasonable deductible level. 

How to Choose the Right Collision Insurance 

The independent auto agents at Acceptance Insurance can help you price and select a plan with collision coverage that will protect your finances at a premium you can afford. Your agent can do this by shopping for the most competitive rates on the best car insurance coverage for you, from among multiple brands. 

Call Acceptance Insurance at 877-405-7102 or get a quick online quote. You can also find an office near you to book an appointment with one of our helpful and knowledgeable independent agents. 

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