Collision insurance is a form of auto insurance that provides coverage for damage to your car due to a collision. It provides cover in case your car collides with a car or an object, or even a rollover. In 2020, the Insurance Institute for Highway Safety (IIHS) conducted a study indicating that approximately 40 percent of all car crashes relate to hitting a fixed object/another stationary vehicle. This insurance is useful in avoiding out-of-pocket expenditure. As an illustration, when your car is involved in an accident, the collision insurance is a coverage that covers the cost of repair, less the deductible. According to a 2021 report by the National Association of Insurance Commissioners (NAIC), collision insurance represents almost 60 percent of all drivers of an insurance policy in the U.S. indicating its significance in terms of financial stability.

How Does Collision Insurance Work?

Here are the seven key aspects of how Personal Injury Protection (PIP) works:
  1. Claim Process: When you have an accident, remember to advise your insurer and report damage. The insurance company evaluates by sending an adjuster who assesses the repair estimates. After all the checks are done, you get the payout without the deductible.
  2. Deductible: The deductible is the money you pay before the insurance coverage becomes available. As an example, suppose your expenses on repairs are 2,500 and your deductible is 500, the company pays 2,000 after you pay 500.
  3. Payout Calculation: The settlement amount is the actual cash value (ACV) of the vehicle including depreciation. In a case where your car is considered a total loss, the value of the car as it was before the accident is paid by the insurance company less the deductible.
  4. Repair Options: You can either pick up a licensed repair shop suggested by your insurer or an independent one. A short-term policy require you to use a sponsored store to get a comprehensive cover, and others are flexible.
  5. Rental Car Insurance: Other collision policies include the coverage of a rental car when repairing your own. Such a covering has restrictions, like price limits on daily rentals and a maximum rental term. Never assume anything about your policy.
  6. Claim Timeline: Your payment usually arrives 2-3 weeks after you claim. The length is determined by the nature of repairs or when the vehicle may be considered totaled.
  7. Contesting a Claim: First, call the company to clarify in a scenario where you do not agree with the insurer. In case the problem is not addressed, you may address it as a complaint to the state insurance department or consult an attorney.

What Does Collision Insurance Cover?

Here are the four cases of collision insurance coverage:
  1. Accidents with Another Vehicle: Collision insurance protects against repair or replacement of your auto in case your car hits a second vehicle, regardless of fault. It assists in covering the damages that occurred in such accidents.
  2. Single-Car Accidents: In case you crashed into something that is not moving (e.g., pole, guardrail, fence), collision insurance protects your car. It covers damage repair costs or replacement in single-car accidents.
  3. Hit-and-Run Situations: When a third party crashes your vehicle and drives away without swapping details, collision insurance is there to cover the damages. It aids in financing the losses incurred as a result of the hit-and-run driver, whether they are locatable or not.
  4. Rollovers: In a case where your car rolls over in an accident, collision insurance assists in repairing or replacing the vehicle. This is regardless of whether the rollover occurs in a collision with another vehicle or a single-car accident.

How to Choose the Right Collision Insurance Policy

Here are four ways to choose the right collision insurance policy:
  1. Assess Vehicle Value: Address the collision coverage cost against the market value of your car. On older or low-value cars, it does not make sense to pay high premiums. Select a coverage that is equivalent to the value of your car to prevent wasting money on protection.
  2. Determine Deductible: Select a deductible that balances premium cost and out-of-pocket expense. An increased deductible decreases your premium, yet raises the amount you pay in the event of an accident. Choose one that you can afford comfortably to pay.
  3. Ensure Reputation of the Insurer: Find out how the insurer is known in processing claims. Check out customer reviews and claim process efficiency. A sound insurer is always there to respond to your needs faster with your money and good customer care services.
  4. Consider alternative covers: Take alternatives such as rental reimbursement and gap insurance. Rental coverage assists in financing a car until yours is repaired. Gap insurance is used to cover the gap between the loan balance and the car's value.

How to File a Collision Insurance Claim

Here are the five ways to file a collision insurance claim:
  1. Report the Accident: Get in touch with your insurance company as soon as the accident happens. Early notification assists in making the claim quicker and allows for evaluating and repairing your vehicle quicker too.
  2. Provide Documentation: Bring all of the necessary documents, including pictures of the damage, police report, and repair estimates. Such documents help the insurer to assess the claim and accelerate the decision-making procedure.
  3. Collaboration with Adjuster: The adjuster inspects your vehicle and determines the severity of damage. You want to be able to then work with the adjuster and provide them all the information they need to get an accurate assessment.
  4. Approve Repairs: Pick an independent or insurer-recommended repair shop. Make sure you confirm with your insurer whether repair costs are within your insurance or make sure that all repairs are approved.
  5. Resolving Claim: Pay the amount of dthe eductible and the rest of the repair is covered by the insurance company. Once the repairs are finished, the insurer issues a payment to the repairer shop less the deductible fee you paid.

Who Needs Collision Insurance?

Here are the four groups need collision insurance:
  1. New Car Owners: Collision insurance serves the interests of new car owners protecting their valuable vehicles. Such a cover helps prevent high costs of repair/ replacement, particularly at a time when the car has a high market value.
  2. Funded or Leased Cars: Collision insurance is required in most car leases and financing contracts. It covers their financial interest in the car so that it is insured in case of damage until the completion of loan repayment.
  3. Urban Traffic Motorists: Traffic in the city brings a higher risk of accidents to drivers in traffic-prone regions. Collision insurance protects us financially by covering the cost of repairing our vehicle in case of an accident in such risky places.
  4. Drivers Without Major Savings: Collision insurance protects you against big repair bills in case you lack savings to cover the hefty repairs. It prevents post-accident out-of-pocket expenses, so you do not have to shoulder huge repair bills yourself.

How to Get Collision Insurance in Houston?

The first step towards obtaining collision insurance in Houston is to conduct some research on local and national insurers. Visit websites of Google, Zebra, NerdWallet or Progressive to compare the premiums, coverages and customer ratings. Then, collect pertinent details of your vehicle, make, model and year. To obtain personalized quotes, go to insurance company websites or comparison sites and use online quote tools. Consider the out-of-pocket payment as well as the cost of premiums when selecting a deductible. Once the coverage is chosen, sign the policy contract and pay the premium. To obtain help, refer to the Texas Department of Insurance website or a local insurance broker in Houston.