What Does Collision Auto Insurance Cover and Why You Need It?
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What Does Collision Auto Insurance Cover and Why You Need It?

Acquiring a new car is a significant investment, and it is always an exciting experience for people. Whether it was acquired through outright purchase, lease, or loan from a third party, it is imperative to choose the right type of auto insurance to cover your vehicle from accidents and other damages. 

If you have never had an accident, likely, you’ll never need to file a claim with your insurance company. However, statistically, you would most likely be involved in at least one accident in your lifetime, and the consequences can be fatal and financially burdening.

 In Toronto, auto insurance laws are set at a provincial level. It is a legal requirement for drivers in Toronto to obtain car insurance, including uninsured auto insurance, statutory accident benefit, and third-party liability. Drivers can purchase additional coverage for more protection against car damage. 

In this article, we will dive into collision auto insurance, what it covers, and the reasons why you should consider them.

What is Collision Auto Insurance?

Just like it sounds, collision auto insurance is a policy that covers the damages done to your vehicle as a result of a collision with another car. It pays to repair or replace your vehicle if you hit a stationary object, like a building, signpost, tree, fence, etc. 

Collision coverage only covers the costs of the damages done to your vehicle; it does not cover third-party expenses. In certain jurisdictions, coverage materializes only if you are at fault in an accident or if you there is no way of knowing who caused the damage done by another car. Car insurance policy considers collision with an inanimate stationary object or another vehicle. 

This form of insurance is often introduced as an add-on to a basic auto policy to ensure car owners in the event of damages caused by a collision. Are you shopping for collision auto insurance in Toronto? Consider using Surex for an affordable rate and quality services.

How Does Collision Auto Insurance Work?

When buying collision coverage, depending on your insurer, you will choose from several deductible amounts, typically $250, $500, or $1,000.

 The deductible is the amount you pay before your collision coverage can pay for damages done to your car. It works such that if you pick a low deductible, your premium will increase, and vice versa. Whichever of the two options you pick, note that you are responsible for paying your deductible toward car repairs as part of a covered claim. 

 There is a limit to collision coverage, and this limit is the maximum amount that your policy will pay toward a covered claim. The collision coverage limit is calculated as the value of your car minus depreciation. This is typically known as the actual cash value of your vehicle.

What Does Collision Auto Insurance Cover?

Auto accident inspection
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The following are situations that qualify as a collision:

Hitting a Tree

If you run into a standing tree or a tree that fell before you hit, it is considered a collision.

Hitting Inanimate Objects

Whether the damage is a minor scrape or a severe dent caused by hitting an inanimate object, it is considered a collision. For instance, slamming into a guardrail, building, fences, stop signs would all be considered a collision.

Car Crash

If your car is involved in an accident with another vehicle, you are in a collision. Collision coverage will apply to one of the cars involved if the at-fault driver is under collision coverage. 

Pothole

If you run into a pothole and damage is caused, insurance brokers treat it as a collision.

Why You Need Collision Auto Insurance

When shopping for auto insurance, you will face the challenge of choosing from various types of auto insurance coverage like accident forgiveness, car rental coverage, comprehensive coverage, depreciation coverage, windscreen coverage, family protection, third party liability, collision coverage, etc. 

According to statistics, almost all car accident cases reported are collisions with another car or a stationary object, making collision auto insurance one of the best decisions when deciding which auto insurance to subscribe to. Collision insurance reimburses the insured for damage sustained to their automobile when they are not at fault.

 It is essential for protecting your vehicle against the financial loss that comes with physical damage to your car. Someone is always at fault when an accident happens. That someone could be you. Collision insurance will cover damage from a collision with another vehicle, tree, pole, guardrail, and most other possible roadway hazards.

FAQ About Collision Auto Insurance

Here are a few questions that policyholders often ponder upon:

Is Car Insurance Mandatory in Toronto?

Car insurance is mandatory in Toronto, and you must have valid insurance to operate a vehicle. It is a punishable offense to be caught driving without insurance.

What are the things that Collision Insurance does not cover?

Collision insurance does not cover medical bills, damages not related to driving, injuries to another person’s vehicle, vehicle theft, fire damage, etc.

Why Do Toronto Car Insurance Rate Changes?

In Toronto, car insurance rates are decided by private insurers, who adjust their rates in response to the manner and numbers of claims they expect to receive. If there are more collisions in and around your area, you can expect your premiums to be high.

Take Away

It is always better to be safe than sorry. Collision insurance is something you would miss the most in case of an accident. However, it only covers accident-related damage. If you’re shopping for car insurance, you’ll want to consider collision coverage and how they might provide additional financial protection. Collision auto insurance is usually a good investment if you can afford them. It saves you the financial strain, in case you are involved in an accident.

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