What does it mean when you have no collision insurance?

If you don't have collision insurance, your vehicle won't be covered on your car insurance policy if you cause an accident. If you're at fault for an accident and don't have collision insurance, you must pay out of pocket for the repair or replacement of your own vehicle. NerdWallet points out that if you have an accident and it's obvious that the other driver is at fault, you should file a claim with your insurance company. The other driver's property damage liability insurance must pay for the damage to your vehicle.

All states, except New Hampshire, require drivers to have a certain amount of liability coverage. Collision insurance covers the costs of repairing or replacing your car if it's damaged in an accident, no matter who's at fault. The law does not require it. If you are involved in an accident in which the other driver is responsible, that driver's policy may not cover the full cost of the damage to your vehicle and your collision policy may pay the rest of your bills.

Available only in some states, it exempts you from your deductible if an uninsured driver causes an accident and your collision coverage has to pay. Collision insurance covers repairs or replacements to your vehicle if it's damaged or destroyed in an accident with another car, regardless of who the at-fault driver is. Because collision coverage is optional, the ability to add it to your insurance policy depends on you and your specific needs. When you add collision coverage to your insurance policy, your provider will let you choose the amount of the deductible.

Compare this to your collision insurance premium to determine if collision insurance is worth it for you. Your liability insurance will cover damage to the other driver's vehicle, but your collision insurance will cover damage to your vehicle, even if you are legally considered to be at fault for the car accident. And it offers all the standard types of car insurance: liability, collision, comprehensive, medical payments, personal injury protection, and coverage for uninsured drivers. Collision insurance reimburses you for the costs of repairing or replacing your car in the event that you hit another vehicle or object.

Collision coverage ensures that you and your vehicle are covered by an insurance policy in the event that you get into an accident caused by fault. Unless your lender or leasing company requires it, your collision insurance will end up costing you more than paying for an accident out of pocket. If you decide that collision insurance is worth it for now, use this calculator again as your car ages and any time you request car insurance quotes. Full coverage insurance has no official definition, but it usually includes collision insurance, comprehensive insurance, and other types of coverage required by the state so that you and others are protected in more situations.

While the law may not require you to maintain a collision insurance policy, there are some cases where you do need one. While collision coverage is not required by state law, your lender or car leasing company may require you to have it.

Carl Somilleda
Carl Somilleda

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