Collision coverage protects your vehicle if it is damaged in an accident. Collision is sold with comprehensive coverage, which provides protection if your vehicle is damaged by something other than a collision, such as your car being stolen or a light pole falling on your car when it’s parked at night. This is not required by the State.
How Does Collision/Comprehensive Work?
To understand this, you should know what “deductible” means. When you purchase an auto insurance policy, you and your agent determine the deductible. This is the amount that you have to pay out-of-pocket (not covered by your policy) in the event of an accident. For example, if your deductible is $500 and you’re in an accident that causes $5,000 in damage to your vehicle, you pay $500 and the insurance company pays the remaining $4,500.
Your insurance policy covers only repairs to bring your vehicle back to the actual cash (“blue book”) value it had before your accident. Collision/comprehensive coverage pays an amount up to the actual cash value of your car to either repair it or replace it (if it is a total loss). For example, if your car is worth $5,000 at the time of the accident, you are covered up to $5,000. If the damage exceeds $5,000, the insurance company declares your car a total loss and pays you $5,000 to help you replace it.
These descriptions are meant to assist you in determining your auto insurance needs. These are not complete descriptions and do not constitute an insurance contract or coverage for specific losses. For a complete description, please consult your policy contract or contact your insurance agent.