Collision Insurance Keeps You Covered

How Much Will My Insurance Company Pay If My Car Is Totaled?

If you have collision insurance on your car and your car is totaled in an accident that is your fault or with an insured or underinsured driver, your insurance company will determine the actual cash value (ACV) of your car at the time of the accident. The ACV of your car is dependent on its current condition and factors in the depreciation of the car. Typically, if the repair estimate for your car is 80% or more than the ACV of the vehicle, your insurance company will deem the car a total loss, and you will be paid the ACV of your car after your collision deductible is satisfied.

The exception to this is if you have purchased a car insurance policy that provides "agreed value" coverage instead of actual cash value coverage. In this case, there is an agreed value listed on your auto insurance policy for your vehicle and your insurance company will use this figure rather than the actual cash value of your car to determine whether or not your car is totaled. The agreed value of a car is typically much higher than the ACV.

What is the Difference Between Collision and Comprehensive Coverage?

Comprehensive and collision insurance are both coverages that respond to the damage to your car. While collision coverage will pay to fix your car due to a collision with another vehicle or object, comprehensive insurance will pay to fix your car if it is damaged by other things such as animals, fire, weather, theft, or vandalism. Both of these coverages have a deductible, which is the amount that you will pay out of pocket towards the damages to your car before your insurance company will pay to have your car fixed.

Does Collision Insurance Cover Other Drivers?

If you have collision coverage on your car insurance policy, your insurance company will pay for the damages to your car when you or any of the other listed drivers on your policy get into an accident. Your insurance company will not cover drivers who are specifically excluded from your insurance policy.

Does Collision Insurance Cover Rental Car Accidents?

When you rent a car from a rental car company in the continental United States, U.S. provinces, Canada, or Mexico, your auto insurance policy will usually provide liability car insurance as well as comprehensive and collision coverage to the rented vehicle as long as you have one car on your policy that has these coverages. If you are renting a car elsewhere, your auto insurance policy may not respond similarly, so you will need to purchase the necessary coverage from the rental car company. Before you travel, contact your insurance agent or insurance company to ensure your auto insurance policy will extend to the car you are renting.

Collision Insurance FAQs

Q: What does collision insurance cover?

A: Collision insurance covers the damage to your car when it is involved in an accident with another vehicle or object.

Q: What is a collision deductible?

A: If you carry collision coverage on your car, you will have a collision deductible. This is the amount of money you must pay for the damages to your car before your insurance company will pay for the rest.

Q: Does my collision insurance cover a rental car?

A: If you have collision coverage on your car, typically, the coverage will extend to a car that you rent in the U.S., U.S. provinces, Canada, or Mexico, but it is important to check with your insurance carrier to confirm this before renting a vehicle.