What is the collision insurance coverage?

collision insurance

Collision coverage is optional insurance that may prevent you from paying for all repairs to your vehicle. If you are found responsible for an accident or if you are involved in a hit-and-run collision, the damage could be repaired if the vehicle is below the total loss threshold. If the vehicle is considered a total loss, collision coverage will not apply.

Collision coverage could also include covered incidents where there is no other party involved, such as if you back into your garage wall or hit and run if the other driver has no insurance coverage.

Although the specific benefits may vary from province to province, the main advantage of investing in collision coverage is that you could reduce your expenses, except for your collision deductible.

How does collision insurance work?

If you damage your car in an accident involving another vehicle or object, collision insurance coverage could allow you to repair your car.

When you make a collision insurance claim, you will be required to pay the deductible stated in your automobile insurance policy. Afterward, your collision insurance could pay for damage to your car up to the actual cash value of the vehicle.

If you are financing your car or have leased it, you may be contractually obligated to have some form of collision damage waiver included in your policy. This allows the bank or dealership to recoup any losses in the event of a collision. Otherwise, collision damage waiver is optional coverage in all provinces.

Consult an insurance agent to find out what type of auto insurance coverage is best for your situation.

What does collision insurance cover?

Collision insurance covers damage to your car up to the actual cash value of the vehicle. This damage can be caused by:

  • An accident or collision with other vehicles
  • An accident or collision involving other objects
  • An accident or damage caused by the overturning of the vehicle

Collision insurance does not cover:

  • Damage caused to another vehicle
  • damage to your vehicle that is normally covered by all-risk insurance (such as acts of vandalism, fire, broken glass), unless it results from a collision
  • Medical bills resulting from injuries caused by an  

What if you don’t have collision coverage?

If your car is damaged in an accident for which you are responsible and you do not have collision insurance, you could find yourself paying out of pocket for the damage caused to your car.

If you were to be deemed not at fault, other auto insurance coverage may cover the cost of repairs, or you may be required to deal directly with the at-fault party’s insurer, depending on the province in which you live.

On the other hand, if the accident was a hit-and-run, you probably wouldn’t be covered without collision insurance.

Consult an insurance agent to find out which coverages are best suited to your lifestyle.

In the event of a total loss, is the damage covered by collision insurance?

Following an accident, an insurance adjuster will assess the condition of the vehicle. If he judges it to be a total loss (or a depreciation), you could be compensated by a guarantee of collision if you are considered responsible.

Your insurer could then pay the cost of replacing your vehicle based on its current market value.

If you are found not to be at fault and you live in a province with a “ no-fault ” system, your vehicle may be covered by Direct Compensation for Property Damage (DCM) insurance. Coverage may vary from province to province, so be sure to check with your insurer if you have any questions.

Is it better to have comprehensive insurance or collision insurance?

Collision insurance and comprehensive insurance are two very different types of coverage. An insurance adjuster will often recommend a combination of both types of coverage for your vehicle.

Collision insurance protects you against payment for damage caused to your vehicle as a result of an accident. The accident may involve another vehicle, or you may be the only one who suffered damage, such as snagging a lamp post. In this type of situation, collision insurance could save you from having to pay for damages yourself after having paid the collision deductible.

All-risk insurance, on the other hand, protects you against covered incidents that are unforeseeable and over which you have no control. This is the case during a theft, an act of vandalism, or even if a tree branch falls on your car and damages it.

Comprehensive insurance can cover incidents that are not covered by your collision insurance. This is why investing in both covers may be the best solution depending on your driving needs. Consult an insurance agent to find out how to get the best coverage for your needs.

What is the difference between collision coverage and hit and run coverage?

In most cases and depending on the rules in your province, if you are involved in an accident for which you are not at fault, the other party involved must provide information about their insurance and their insurance company may assume the damage.

However, in the case of a hit and run, there is no way to get his information as the other person fled the scene of the accident. You can file an insurance claim and have the damages paid for by other coverage, or by specific hit-and-run insurance coverage.

Provinces without liability may have other coverage in place at the provincial level, such as SAAQ in Quebec or ICBC in British Columbia

Consult an insurance agent to find out what coverage you should purchase if you are ever the victim of a hit-and-run.

By Master James

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