How Is Your Premium Calculated
An incident-free driving history will always result in a lower premium.
Insurance companies group you with other people who share your general risk characteristics – such as the number of years driving experience. To calculate your individual premium , the company uses a base rate for your group, then adjusts it to reflect your individual risk factors and any discounts for which you are eligible. In figuring out your actual premium, insurance companies may consider factors such as your years of driving experience, the number and type of your accidents, the number and type of your traffic violations, and the vehicle you drive. Insurance companies may also consider other risk factors if those factors are relevant to risk and approved by the Commissioner.
Prohibited Underwriting and Rating Factors:
Insurance companies are prohibited from using certain factors for either underwriting or rating in Massachusetts. Underwriting is the way a company decides it wants to write you a policy . Rating is how a company figures out your actual premium. A rate for each group will be set based on the claims paid by the insurer for the people in that group. The higher the average losses from a group, the higher the rates for that group.
Key Things To Know About Comprehensive And Collision Insurance
- Comprehensive insurance covers damage to your car caused by something other than a collision, such as a fire, natural disaster, falling object or vandalism.
- Collision insurance covers repairs to your own car when you hit another vehicle, an object like a tree or fence, or a road hazard like a guardrail.
- Neither comprehensive nor collision insurance covers damage to someone elses vehicle.
- The cost of comprehensive and collision insurance is determined largely by the value of your car.
- Comprehensive and collision may need to be purchased together, though some companies offer comprehensive-only policies for vehicles that are in storage and not actively being driven.
Collision and comprehensive insurance will only cover damage to your own vehicle, not damage to other peoples vehicles or property such as their home or fence. Additionally, collision and comprehensive do not cover medical expenses of any kind.
In an accident, the at-fault drivers liability insurance covers the victims injuries and property damage. The at-fault driver must use their own health insurance, personal injury protection, or MedPay to cover their own medical expenses.
In order to get a better handle on what comprehensive and collision insurance cover, lets consider two examples:
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Car Accidents Where Your Collision Insurance Would Cover You Would Be:
- Car collision – As previously stated, if you were to cause an auto collision with another drivers vehicle, your collision insurance would cover damages to your own car.
- Collision with a stationary object – If you were to crash into a parked car, tree, or any other roadside object, you would be able to file a collision insurance claim. The accident itself was still your fault, so itâs all the same for the car insurance company.
- Car becomes stuck – You can get your car stuck by steering it into a ditch, pothole, or perhaps a flooded road from a storm or a natural disaster. Even if your car flips over, it would still be covered by collision insurance. These kinds of accidents are tricky because things like potholes arenât visible until the last second.
- Hit-and-run – When a driver damages your car, their personal liability should cover those damages. But, say that the driver speeds away. Now, you wouldnât be able to file a liability claim. Instead, youâre able to file a collision claim if the at-fault driver canât be found.
The Right Car Insurance Policy For You
Its like some car insurance companies are purposefully trying to make getting car insurance as difficult as possible. Thats going to be a hard no for us. Getting the right car insurance policy, including collision coverage, should be simple and easy. And it is when you work with one of our Endorsed Local Providers . They are RamseyTrusted and would love to help you find the best policy for your needs. The right plan not only protects you and your loved ones, but it can also save you money and help you reach your financial goals sooner!
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Comprehensive Vs Collision Coverage
McKayla Girardin, Car Insurance WriterApr 12, 2022
Collision coverage helps pay for damage to your own vehicle after crashing into another car or object. Comprehensive is a separate type of coverage from collision that protects your car from things like falling objects, theft, and vandalism. Collision and comprehensive insurance are often combined to protect a vehicle against most forms of damage, as part of full coverage car insurance.
How Do Deductibles Work With Collision Insurance
Collision coverage claims are subject to a deductible, the amount you must pay out-of-pocket before your insurance company covers the remaining balance, up to your policy limits. Deductibles range from zero dollars to $2,000 with most drivers choosing a $500 deductible, on average, according to American Family Insurance.
Example: After a covered collision, your car repair bill totals $1,200 and you have a $500 deductible. After you pay the $500 deductible, your auto insurance company will cover the remaining $700.
Your deductible amount can affect your monthly premium because you will be shouldering more of the costs after a covered car accident with a higher deductible and less with a lower deductible. Therefore, a higher deductible can result in a lower monthly premium. Conversely, a lower deductible can increase your monthly premium because you are transferring that financial responsibility to the insurance company.
If youre a safe driver with a clean driving record, consider choosing a higher deductible. You only pay a deductible if you get into a car accident and safe driving habits will pay off over time with lower premiums.
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How To File A Claim After A Collision
In situations where the cost of repairs isnt much more than the deductible, you may decide to fix the car without filing a claim. In other scenarios, though, filing a claim can help make otherwise costly repairs more manageable. If you want to file a collision insurance claim, you would typically follow these steps:
What Is A Collision Deductible
A collision deductible is the amount you’ve agreed to pay before the insurance company starts paying for damages. You can think of it as how much of the financial risk you’re willing to take on if you’re in an accident. Typically, the more risk you’re willing to take , the lower your insurance cost would be. The less risk , the higher your insurance cost would be.
Let’s say you’re involved in an accident that causes $1,000 in damage to your vehicle and you have a $250 deductible on your collision coverage. You’ll pay the first $250 in damage, normally to the body shop, and then your insurance will pay the remaining $750.
The above is meant as general information and as general policy descriptions to help you understand the different types of coverages. These descriptions do not refer to any specific contract of insurance and they do not modify any definitions, exclusions or any other provision expressly stated in any contracts of insurance. We encourage you to speak to your insurance representative and to read your policy contract to fully understand your coverages.
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How Much Does Collision Insurance Cost
On average, the cost of collision insurance runs about $378 per year.1 But what youll pay for it depends on a few things:
- Your driving history. If you show that you have consistently been a safe driver, youll pay less for collision insurance.
- The value of your vehicle. Whats more expensive to repair or replace: a two-year-old Mercedes or a 10-year-old Honda Civic? Probably the Mercedes.
- The size of your deductible. The higher your deductible, the lower your collision insurance premium.
Lets dig into deductibles a little further.
Differences Between Comprehensive And Collision Insurance
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Whats The Average Repair Time For A Damaged Car
The average repair timethe time you drop off your car at the auto body shop to the time you pick it upis almost 11 days for cars, according to CCC Information Services, a provider of data and technologies to the automotive, collision repair and insurance industries.
The average repair time has increased over the years, which CCC attributes to greater vehicle complexity and many sophisticated vehicles that take more time to repair.
Limited Collision With A Deductible
The owner of a damaged vehicle which is covered by a limited collision coverage with a deductible policy must pay a deductible before his or her insurance company begins paying for the vehicle damage repairs, even if the operator or driver of the insured vehicle was not at fault in causing the accident.
Under both types of limited collision coverage, if the operator or driver of the covered vehicle was more than 50% at fault in causing the accident that gave rise to the vehicle damage in question, then:
- Limited collision coverage provides no benefits or coverage and,
- The vehicles owner will be forced to pay out-of-pocket for most, if not all, of the repair costs for his or her accident-related vehicle damage.
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Quick Facts On Collision Coverage
- Collision coverage can repair or replace your car after an accident
- Collision coverage is usually optional unless youre leasing or financing your car
- You can choose the deductible you pay, which will affect your premium
- Your coverage limit is maxed out at the actual cash value of your vehicle
Collision coverage can help repair or replace your car you crash into another object or another vehicle, or if you roll it over. This type of coverage is meant to fix up or replace your car after a wreck.
While collision coverage will pay for damage to your own vehicle in an accident, property damage liability coverage is the type of coverage that pays for damage to the other persons car. Comprehensive coverage, as stated above, is the coverage that will pay for damages to your vehicle that didnt result from accidents.
Is Auto Collision Coverage Required
Car insurance collision coverage isn’t legally required in any state, but your finance company may require it to protect their investment if your car is leased or financed. If you’ve paid off your vehicle and own it outright, you’re never required to carry collision coverage on your auto insurance policy.
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Why Buy Collision Coverage
If you owe money on your car, or if you’re leasing it, collision coverage usually isn’t optional most lenders and lease holders require it. If your car is paid off, however, you can choose whether to buy collision coverage.
One thing to consider: How much it would cost to repair or replace your vehicle if it were damaged or destroyed in an accident. If you couldn’t afford to fix your car or buy a new one after a wreck, purchasing collision coverage could give you some peace of mind.
Where Can I Find The Best Collision Coverage For My Car
All major insurers offer collision coverage as an optional add-on to your car insurance policy. It is one of the basic coverages available, including liability, comprehensive, medical payments, personal injury protection, and uninsured/underinsured motorist coverage.
Our team of analysts sought quotations from five different insurance providers. This is done to get collision coverage. We found that adding collision coverage to your policy could raise your monthly premium by $20 to $270.
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We found the most affordable quotes from Progressive and State Farm among the major insurance providers, followed by Allstate. However, your car insurance quotes could vary as they are calculated using several criteria. The best way to find the most affordable car insurance quotes for your needs is to shop around and obtain several quotes online.
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Why Is It Important
Without collision insurance coverage, a vehicle owner has nearly no other way of paying for the vehicle damage repair costs.
For instance, the owner of a damaged vehicle is generally prohibited from suing the at fault driver for the full amount of the repair costs because Michigans No-Fault law has essentially abolished the at fault drivers tort liability for amages to a motor vehicle. )
What Are The Benefits Of Collision Insurance
The main benefit of collision insurance is that you won’t have to pay for high repair costs after an accident, if you would be unable to afford repair costs or if you simply value peace of mind.
Collision insurance will also pay for damage to your car if you’re in a crash, but can’t find the other driver â whether you’re in a hit and run, or if the other driver simply stops responding to your calls after the crash occurs.
If you carry collision insurance, you can typically initiate the repair process very soon after a crash. If you’re counting on the other driver’s liability coverage to pay for the damage, you may need to wait for the insurance companies to determine who was at fault. If you file a collision claim and it’s later determined that the other driver’s liability coverage should pay, you’ll generally be reimbursed automatically.
Another benefit is that you only deal with your own insurance company, rather than another insurer with less incentive to pay for your claim. Collision insurance can also be used toward a rental car in most cases, which can spare you from having to buy rental car insurance.
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How Does Collision Coverage Differ From Comprehensive Insurance
Collision insurance typically covers accidents where the insured vehicle collides with something like a tree, railing, or another vehicle, causing damage to the covered vehicle.
Comprehensive coverage usually covers passive incidents such as extreme weather, a collision with an animal, vandalism, or theft that cause damage to the insured vehicle.
An Insurance Collision Center Near Richmond Hill That Enjoys Restoring Your Cars
Having your car repaired at an insurance collision center has numerous benefits. For instance, most insurance collision centers provide a range of services such as a towing service, vehicle replacement services, auto damage claims support and auto collision repair services. You can obtain all these from our renowned insurance collision center.
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How The Collision Insurance Deductible Works
Usually, collision insurance is subject to a deductible, a set amount subtracted from any collision claim check. You can choose your deductible amount, which typically ranges from $500 to $1,500.
For example, say you swerved to avoid hitting a squirrel in the road and accidentally hit a lamppost instead, and you have a collision deductible of $1,000. Your insurance company would pay for the cost to repair the damage to your car, minus $1,000.
If the cost of the damage was less than your $1,000 deductible, you wouldnt want to make a claim because your insurer wouldnt pay and would likely increase your rates later for having a claim. If the vehicle was destroyed by the impact, your insurer would subtract $1,000 from your cars estimated value before the crash and send you a payment for that amount.
What Collision Insurance Covers
Collision coverage is all about protecting your vehicle when it collides with another vehicle or object .
Collision Coverage on Non-Owned Vehicles
Collision coverage can also apply to rental cars in some situations and to what we call a non-owned vehicle. Thats a vehicle you have permission to use and:
- Is NOT owned by anyone on your policy or in your household
- Is NOT listed on your policy
- Is NOT a car anyone on your policy or in your household has general consent to use
Collision Coverage and Non-Owned Utility Trailers
Just as with the non-owned vehicles, up to $500 of Says Collision coverage can extend to non-owned utility trailers, including the cargo being carried on the trailer as long as it is not already covered under another coverage.
Collision Coverage and Modifications
At Say, if you made the following modifications to your vehicle before your accident, they would also be covered under Collision coverage, but only up to $5000:
- Custom paint job
- Added wireless components
- Added child restraint systems
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