Collision insurance is a crucial component of your car insurance policy, but what exactly does it protect?
Most drivers assume collision coverage handles claims when you “collide” with something, but this coverage actually protects against some other interesting types of incidents.
We’re going to go through the types of coverages provided by the collision portion of your car insurance policy and also take a look at the actual language in the policy that extends this coverage.
In addition, you’ll learn how collision coverage applies in some different real-world scenarios.
What Does Collision Insurance Cover?
Collision insurance typically covers damage from:
- Hitting another car
- Colliding with stationary objects like trees, poles, or buildings
- Rolling your vehicle
- Being hit by another driver (though their insurance should cover this if they’re at fault)
But what about that pothole that destroyed your tire last month? Or the shopping cart that scratched your door in the parking lot? These incidents, while frustrating, aren’t typically covered by collision insurance. They fall under comprehensive coverage.
Auto Insurance Policy Language: Boring, Yes. Insightful, Definitely!
Let’s take a look at the specific language used in the standard ISO auto insurance policy form.
This is a form used by quite a few insurance companies as the basis of their own policy. They can modify the language in the form to suit their needs, but it usually doesn’t stray too far from the standard form.
Under the Collision Coverage section, it typically states:
“We will pay for loss caused by collision to your covered auto, including its equipment, minus any applicable deductible shown in the Declarations.”
The policy then defines collision as:
“Collision means the upset, or collision with another object of your covered auto.”
This language is really important because it clearly outlines what’s covered while leaving room for interpretation in certain scenarios. Always remember: insurance is a contract, and the specific wording matters!
Ok, so we know what the policy says is broadly covered under collision coverage, but there are some things that are not covered which may be covered under other policy coverages.
What’s Not Covered by Collision Insurance?
While collision insurance offers substantial protection, it’s not a catch-all solution. Here are some situations where collision insurance typically won’t help:
- Theft of your vehicle
- Damage from vandalism
- Fire damage
- Damage from natural disasters, such as floods, hurricanes, or earthquakes
- Damage caused by hail
- Windshield damage from a falling tree branch
- Mechanical breakdowns or wear and tear
- Medical expenses for injuries sustained in an accident
- Lost wages due to injuries from an accident
- Legal fees resulting from an accident
- Damage caused by hitting an animal
These types of losses are covered under either the comprehensive coverage on your policy or the liability portion.
Real-World Scenarios of Collision Insurance Claims
Collision insurance is designed to cover the costs of repairing or replacing your vehicle if it’s damaged in certain types of accidents.
Here are five real-world scenarios where collision insurance would pay a car insurance claim:
Scenario 1: Rear-End Collision
Situation: You are driving in heavy traffic and decide to quickly switch to your favorite Taylor Swift playlist on Spotify. You fail to stop in time, causing you to rear-end the vehicle in front of you. Bummer.
Coverage: Collision insurance would cover the cost of repairing the front-end damage to your vehicle. Even if you are found at fault for the accident, your collision coverage will help pay for the necessary repairs to your car. However, remember that you’d still be responsible for your deductible.
Scenario 2: Single-Car Accident
Situation: You are driving on a rainy night when you lose control of your vehicle, skid off the road, and hit a tree spilling your Caffe Latte all over your console.
Coverage: The damage to your car resulting from hitting the tree would be covered by your collision insurance. This includes damage to the body of the car, as well as any mechanical components affected by the impact.
Scenario 3: Multi-Car Pile-Up
Situation: Driving down I-70 after a ski trip in Vail, you are involved in a multi-car pile-up on the highway. Multiple vehicles are damaged, including yours, as cars slide into each other on the icy road.
Coverage: Collision insurance would cover the cost of repairing the damage to your vehicle, regardless of who was at fault in the pile-up. Your insurance will help pay for the repairs up to the actual cash value of your car, minus your deductible.
Scenario 4: The Parking Lot Predicament
Situation: You’re at the mall, circling the packed parking lot in search of a spot. Finally, you see one and start to pull in. Unfortunately, you misjudge the space and end up scraping the side of your car against a concrete pillar separating the parking spaces.
Coverage: Although this isn’t a high-speed collision, it still falls under collision coverage. The damage to your car’s side from hitting the pillar would be covered by your collision insurance. This scenario illustrates that collision insurance isn’t just for major accidents on the road – it can also help in low-speed incidents in parking lots or driveways.
In all these cases, collision insurance would step in to cover the cost of repairs to your vehicle, subject to your deductible. These scenarios highlight the value of collision coverage in protecting you from a range of potential accidents, from major crashes to minor scrapes.
Scenario 5: Swerving to Avoid an Obstacle
Situation: You are driving on a rural road at night when a deer suddenly jumps from the bushes onto the road. To avoid hitting the animal, you swerve sharply, losing control of your vehicle. Your car veers off the road and rolls over into a ditch.
Coverage: The damage to your vehicle from this rollover would be covered by collision insurance. In this case, the insurance would help pay for the repairs to your car, up to its actual cash value, minus your deductible.
The Bottom Line
Collision insurance is a valuable safeguard against the unexpected. It protects you from potentially costly repairs resulting from collisions with vehicles or objects. However, it’s not a cure-all for every type of vehicle damage.
Always read the fine print in your policy, ask questions, and don’t hesitate to seek clarification from your insurance agent or provider.
During his career as an independent insurance agent, Ryan Grabenstein was appointed with Progressive, Allstate, Nationwide, Travelers, and many smaller regional and mutual companies. He has a Bachelor's degree in Finance from the University of Nebraska at Lincoln and Certified Insurance Counselor (CIC) personal and commercial lines training.