When you’re involved in a collision, you probably have a little piece of mind that your insurance company is going to take care of everything. But did you know that there are a lot of things you need to know about your collision insurance so that you don’t run into any legal or financial trouble following a collision? Keep these five things in mind if you find yourself involved in an auto accident; they can save you a huge chunk of time and money.
Collision Coverage Pays for Accidents Caused by You (But Only for Your Vehicle)
If you are involved in a collision and are found to be the party at fault, having collision insurance can safeguard against the exorbitant costs for repair or replacement of your vehicle. However, collision insurance will pay for damages to your car only- any damage done to the other car will be paid for by your liability insurance coverage, and you can expect your rates to increase as a result.
Collision Coverage Also Pays for Accidents NOT Caused by You (But Only for Your Vehicle)
Collision coverage is a no-fault type of insurance, meaning that no matter who is at fault, the motorist who is covered by the insurance will receive a payout. Usually the other driver’s insurance will pay for damages to your vehicle via property damage liability insurance; however, if there is some sort of delay in payment by the other motorist’s insurance company, or if their insurance company is unwilling to admit liability of their insured driver, you can always file the claim through your insurance company’s collision coverage and get the repair or replacement of your vehicle done much more quickly, then seek reimbursement from the other motorist’s insurance company after paying for your damages.
Collision Insurance is Not Mandatory…If You Own the Car
Unlike property damage liability insurance, which is required by law for all motorists to carry, collision insurance is not mandatory, and in some cases may be unnecessary. For instance, any vehicle that is valued at under $5000 need not carry collision insurance, as the amount needed to replace such a car does not justify the monthly premium price of the coverage. Keep in mind that this only applies to vehicles owned outright by the motorist. Most auto loan companies require a driver to carry collision insurance if they are financing a vehicle, and it goes without saying that auto companies will not lease a vehicle to someone if they can’t prove they carry collision coverage.
Don’t Forget About the Deductible
When you purchase collision insurance for your car, you will be asked by your insurance agent what kind of deductible you want on the coverage. The deductible is the amount of money you are required to pay, while the insurance company picks up the rest of the cost. People who opt for higher deductibles tend to pay less on insurance premiums; however, the higher the deductible, the more they have to pay in the event of a collision. For example, let’s say you were in an accident that was your fault, the estimated damage total is $5600, and you have collision coverage with a $1000 deductible. You are on the hook for that $1000, but the insurance company has to pay the remaining $4600 in damages. $1000 is the usual deductible amount for collision insurance, but some people prefer to pay deductibles of $500, or no deductible at all, for an increased insurance premium.
If You’re Not at Fault, You (Usually) Don’t Have to Pay a Deductible
What if you weren’t the one who caused the accident? Do you still have to pay the deductible before receiving the rest of the amount for damages from the insurance company? The short answer is no: if you are proven to not be at fault, you would file your insurance claim through the at-fault motorist’s insurance company, and he or she would pay the deductible on their plan while you receive the amount of the damage through their liability insurance. However, if for some reason you have to file the claim through your own collision insurance (for instance, if the other motorist is uninsured), then you are unfortunately responsible for the deductible amount.
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Still have questions? Click here to contact Sherrill Paint & Body and we can fill you in on collision insurance and how it affects you when you are getting post-collision auto body repair done. We are Birmingham’s trusted name in auto paint and body restoration and repair, and look forward to helping you get your car back to its pre-collision shape! Call Sherrill Paint & Body today at 205-322-5684 to schedule an estimate for your car’s body restoration.