Collision insurance is a type of insurance policy that can help cover the cost of repairing your car if it is damaged in a crash. This includes accidents where you hit another car or an object like a tree, pole or fence. It also covers single-car accidents, like if your car rolls over. Unlike third-party or basic cover, collision insurance pays for any damage to your own vehicle, regardless of who caused the accident.
Let us understand what collision insurance means and what you should consider before choosing a policy.
Collision policy: Pros and cons
Like any insurance policy, collision insurance has both advantages and disadvantages.
Pros:
- It protects your car if you're involved in a crash, even if it's your fault.
- It gives peace of mind when driving, especially in busy areas or bad weather.
- It helps you get back on the road faster after an accident, as the insurance pays for repairs or replacement.
Cons:
- It adds to your monthly or yearly insurance cost.
- It only covers collision damage, not damage from theft, weather or animals.
- If your car is old or not worth much, the payout might be less than the cost of the policy.
Comprehensive insurance vs collision insurance
Before choosing a plan, it's helpful to understand the key differences between comprehensive car insurance and collision insurance.
Comprehensive insurance helps cover damage to your car from events other than a crash. This includes theft, fire, floods, falling objects or hitting an animal. It’s called “comprehensive” because it provides wider protection for your car.
Deductibles in comprehensive & collision insurance
The deductible is a significant factor in collision insurance claims. It refers to the amount subtracted from an insurance claim. For instance, if you have INR 35,000 deductible and your car repair expenses after an accident amount to INR 2,00,000, you will receive an insurance cheque for INR 1,65,000 (INR 2,00,000 – INR 35,000 = INR 1,65,000).
When purchasing this insurance, policyholders can choose their deductible amount. Opting for a higher deductible generally results in lower car insurance rates as the insurer’s payout decreases if a claim gets filed.
Frequently Asked Questions
- Is collision insurance required by law?
No, collision insurance is not needed by law. But, it may be required by a lender if you have a car loan or lease.
- Can I get collision insurance without comprehensive cover?
Yes, but most insurers recommend combining both for full protection.
- Will collision insurance cover me if someone else hits my car?
Yes, but if the other driver is at fault and insured, their insurance should pay. Collision insurance helps if they are uninsured or if you are at fault.
Conclusion
Collision insurance is a valuable part of a strong car insurance plan, especially if your vehicle is new or has high repair costs. It covers damage from accidents and helps you avoid large repair bills. When choosing a policy, consider combining collision insurance with comprehensive car insurance for full peace of mind.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the topic featured in the article. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information