Collision Coverage gets your vehicle fixed.

But your insurance company will fix it with used parts! Make sure you read this section carefully so you do not get burned in the process.

Collision Coverage (also know as Protection against Loss to the Auto)features:

- First Party Coverage

- No Fault based

- Deductible Applies

- No Limits on amount of coverage

Collision Coverage protects your insured auto. This coverage is a no fault based. Therefore, if you get in an accident, and your vehicle is damage, your insurance carrier must fix your vehicle once they determine coverage exists (usually the day you report the claim).

There is a deductible that applies to this (most common is $500) but I have seen deductibles as high as $1500. The lower the deductible the less you have to pay at the time of fixing your car.

Equally, the lesser deductible rate, the higher your premium. Your deductible should be the rate you feel comfortable with and you are able to pay to repair your auto (if you have $500 in your savings account, then you should have a deductible for less than that amount).

There is no sense to have a deductible that is so high that it might be 50% of the value of the vehicle. Say you own a vehicle that is worth $3000.You should not pay for deductible that is $1500.

You want to read your policy closely, especially the definition of "your insured auto" under the Collision Coverage . You will see that most insurance policies out there will extent the definition of your covered auto to attached trailers.

Therefore, if you come around a corner and you hit your trailer against something, chances are that damages to that trailer are covered under the collision portion of the policy (just note that the contents of the trailer will not be cover, just the trailer itself).

The definition will also be extended to cars you are renting. So, if you travel and get a rental car, then your policy will cover that car (still subject to your deductible and the terms of your policy).

This is the reason why every rental car place will ask you for proof of Comprehensive and Collision Coverage or full coverage insurance. In addition, cars that you borrow will be covered, but you will notice that those cars will only be cover if the owner of that car does not have insurance in it (see our other terms section).

But what is a collision?

A collision is defined in the policy under the Collision Coverage. It is the actual impact of you vehicle against an object. So if you are driving down the road and your vehicle hits a pothole, did you have a collision? Yes, your vehicle just collided against the ground. The same logic applies to a rollover accident.

There are exclusions to the Collision Coverage. Collisions with animals are not covered. Therefore, if you hit a deer, this coverage will not protect the damages to your car. If a tree falls on top of your car, this will not be considered a collision.

Collision Coverage is meant for those accidents where there is no Act of God. An Act of God is defined in many policies as acts of nature (wind, hail, water, flooding, earth movement, etc.) Exclusions also include falling objects or projectiles (the shopping cart that came and hit your door).

So what is exactly covered under the Collision Coverage?

This coverage is designed to fix or replace your car and put you in the same position that you were just before the accident (indemnification). This sounds good right? Well it depends what you mean by good.

Your insurance company will pay only actual cash value (ACV). As explained before, this means that they will depreciate parts or the entire auto before paying. They will also have the Reasonable and Necessary Clauses written all over the Collision Coverage. What is that mean then?

It means that the insurance will tell you that you have to put used parts in your car. Say what? Yeah, the theory is that since you had a used car, and they only pay actual cash value (what you had) they will put used parts back in (put you back in your place). They will put OEM (after market parts in your vehicle). The debate on this point is heated. Insureds feel ripped off when they learned that their well taken care off vehicle will be fixed with some lower quality parts.

Insurance companies and after market parts manufactures will tell you that this parts are made to specifications and they are just as good as the dealer parts. Although this is hard to believe, there are several body shops and mechanics that have told me that this is true.

If you are in this situation, I recommend you to inspect every part, and make sure they are Japanese or American parts (they are fairly safe, most of the time anyway), and you should stay away from any Chinese or Taiwanese parts. If you cannot stand the thought of having lower grade parts, then you can pay for the difference between dealer and the aftermarket parts.

Collision Coverage excludes accidents with animals. Comprehensive Coverage covers that and much more. Read more.

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