Collision insurance how does it work

If you collect from New Age, you give up your right to collect property damage from Incidental--except for your deductible amount. Personal Injury Claims Are Different. Nothing you do under your own collision coverage affects your right to pursue a personal injury claim against the other driver's insurance company.

You are free to go after the other driver's insurance company for any injuries and lost income resulting from the crash. There are two main advantages to claiming property damage under the collision coverage of your own policy rather than in a third-party claim. First, your own car insurance company is likely to settle with you more quickly.

This is because collision coverage pays regardless of fault. A third-party claim is paid only if the other party's fault is shown, and that often takes some time if the other insurance company disputes the degree to which its insured was responsible for the accident. Or the other insurance company may simply stall to see whether you will give in on the question of fault.

The struggle over who was at fault does not come up under your own collision coverage, and so these delays in paying out do not occur. Your own insurance company must reimburse you immediately after you have complied with its rules regarding inspection and estimates and you have agreed on a repair option.

If the collision coverage policy limit is less than the cost of repairing the vehicle, you will have to come up with the rest of the repair costs out of your own pocket unless you settle a claim against the other driver's insurance.

If the deductible is large and you need the amount to pay for repairs, this can present an added problem in getting your car repaired. Collision coverage applies only to vehicle damage, not to things like: Medical bills and lost wages yours, a passenger's or another driver's. That should be covered by your liability policy.

Damage caused by hitting an animal that ran into the road, or damage caused by a weather event, such as hail, flooding or strong winds. This would be covered by your comprehensive coverage. Watch the video. Show Descriptive Audio Version. How do you choose a deductible for collision? How does collision coverage compare to comprehensive? Comprehensive insurance covers damages caused by: weather events, such as tornadoes, flooding and hail falling objects, such as a tree limb snapping off and falling on your car vandalism fire animals Collision covers car accidents, specifically when the accident was caused by you.

Do I need collision coverage on an old car? How much money do you have on hand? If you had an accident tomorrow, could you come up with the funds to repair or replace your car? How much is your car worth? Collision insurance tends to cost a lot more than comprehensive insurance because collision claims are more common.

Choosing higher deductibles can lower your premium, as long as you can cover the out-of-pocket costs. Learn more in our comprehensive versus collision insurance explainer. Not sure when to drop collision insurance? This is the most you could get from a collision claim. Take the amount above and subtract the cost of your collision insurance for the duration of the policy, usually six months. So you might decide to take the risk of canceling it now and saving on premiums.

Large and positive, keeping collision insurance makes sense. Even if you decide collision insurance is worth it for now, revisit the math as your car ages and any time you get car insurance quotes. You can drop it if the collision deductible combined with the total cost of the coverage is higher than the current market value of your car.

Probably not. The coverage only pays out up to the current market value of your car, minus your collision deductible. Keep in mind that the cost of car insurance depends on several factors, such as:. When you take all factors into consideration, the age of the vehicle is only a small factor in the overall price of car insurance. All coverages are subject to compliance with the Statutory Conditions outlined in your policy.

Please refer to your insurance certificate for further details. File a Claim Get a Quote. Menu Close Menu. EN View Details. Back to Claims. What's collision coverage? So, when should you choose collision coverage?