Collision Insurance
Collision insurance is a type of insurance policy that covers physical damage to a vehicle caused by a collision with another vehicle or object. It is typically required by lenders when financing a vehicle, and it is also available as an optional coverage for those who own their vehicles outright. Collision insurance covers the cost of repairs or replacement of the vehicle, minus any deductible that the policyholder has chosen. It also covers the cost of towing and storage fees, as well as any legal fees associated with the accident.
History of Collision Insurance
Collision insurance has been around since the early 1900s, when the first automobile insurance policies were written. At the time, the coverage was limited to liability coverage, which covered the cost of damages to another person or property caused by the policyholder. As the automobile industry grew, so did the need for additional coverage, and collision insurance was added to the list of available coverages.
In the 1950s, the insurance industry began to offer comprehensive coverage, which included collision insurance as well as other types of coverage such as theft, fire, and vandalism. This type of coverage is still available today, and it is often the most comprehensive type of coverage available.
Comparison of Collision Insurance
| Coverage | Collision Insurance | Comprehensive Insurance |
|---|---|---|
| Cost | $500 – $1,000 | $1,000 – $2,000 |
| Coverage | Physical damage to vehicle | Physical damage to vehicle, theft, fire, vandalism |
| Deductible | $500 – $1,000 | $500 – $1,000 |
Summary
Collision insurance is a type of insurance policy that covers physical damage to a vehicle caused by a collision with another vehicle or object. It is typically required by lenders when financing a vehicle, and it is also available as an optional coverage for those who own their vehicles outright. Comprehensive coverage, which includes collision insurance as well as other types of coverage such as theft, fire, and vandalism, is often the most comprehensive type of coverage available. For more information about collision insurance, you can visit the websites of your local insurance provider or the National Association of Insurance Commissioners.
See Also
- Liability Insurance
- Comprehensive Insurance
- Uninsured Motorist Coverage
- Underinsured Motorist Coverage
- Medical Payments Coverage
- Personal Injury Protection
- Rental Reimbursement Coverage
- Gap Insurance
- Towing and Labor Coverage
- Roadside Assistance Coverage
