See: Auto insurance
If you crash into someone else’s home, you’re covered. If you drive off a cliff and into a river bed, you’re covered.
How is it different from other coverages such as liability and comprehensive? These different coverages can be confusing, especially when their names are as similar as collision and comprehensive.
If your car is damaged as a result of a fire, flood, strong winds, or theft, then you need to take a look at our article about comprehensive coverage.
When Do You Need Collision Insurance?
Collision insurance coverage is there to protect you if you are driving a vehicle that you may not be able to pay for repairs out of pocket in the event of a crash.
Let’s say you bought a brand-new car, you’d probably want collision coverage on that because if you were involved in an accident that was your own fault (you hit something, not the other way around) you would have to pay for the repairs which could potentially be expensive.
We should also mention that if your car is leased or is not fully paid for, most lenders require that you maintain collision insurance coverage as part of the terms of the lease or loan. You will most likely have to provide proof of coverage during the start of this process.
Is Collision Insurance Required?
Collision insurance is not required in any state. While laws regarding car insurance vary from state to state there are no states that currently require drivers to carry collision insurance.
For drivers who are driving older cars or don’t mind driving around a car with a big dent or missing bumper, they have the option to forgo collision coverage.
This then means that they are responsible for repairs to their own vehicle when it comes to damage incurred through their own actions (they can still be reimbursed for repairs if they are rear-ended).
This can be a convenient means of saving money on monthly car insurance premiums, but it isn’t right for everyone.