1. Home
2. Blogs

What is Collision Coverage in Car Insurance?

• 
• 
• 
• 0
• 0

The increasing number of vehicles on the road raises the probability of motor accidents. Car owners are hence advised to invest in the right car insurance policy to stay financially covered against hefty repair bills resulting from such mishaps. This is where the importance of collision coverage in car insurance comes into play. Whether it's another car or a stationary object, if your vehicle sustains damage due to a collision, you can get compensated for the loss under this cover.

Learn everything there is to know about collision coverage in car insurance below.

What is Collision Coverage in Car Insurance?

Collision coverage refers to a component of car insurance that pays for damages sustained by the insured vehicle due to a collision. In simple words, it offers coverage for your car when it collides with another vehicle or a stationary object, regardless of who is at fault. In India, collision coverage is not available as a separate policy. Instead, it is an integral part of the own damage component and is available bundled with the standard standalone own damage and comprehensive car insurance policies.

To get a clear understanding of how collision coverage and comprehensive insurance are different, read our blog on Collision Insurance and Comprehensive Insurance for Your Car.

How Does Collision Coverage Work?

The collision coverage secures your vehicle from common collision mishaps and reduces your financial risk. To understand how it works, let us discuss it via an example:

Suppose, while getting out of the parking area, you hit a pole or another car or bike hits your car. In this case, you can raise a claim under the car insurance collision coverage, and the insurer will cover the necessary repair costs of your car. For example, if the repair bill is of ₹25,000 and your total deductible is ₹3,000, then you will have to pay ₹3,000 while the insurer covers the remaining, i.e., ₹22,000.

What is Included in Collision Coverage?

Any direct damages to the insured vehicle due to an event of collision are covered under collision insurance coverage in the car insurance. Here is a brief overview of its inclusions:

1. Collisions:

It offers coverage for damages to the insured vehicle resulting from a collision with another vehicle or non-vehicular object, such as a wall, pole or tree.

2. Repairs & replacements:

It covers the cost of necessary repairs and replacement of damaged parts during valid, collision-related own damage claims.

3. Rollover accidents:

It may also cover damages sustained by your vehicle in single-car accidents, such as a vehicle rolling over on its side or roof.

What is Excluded from Collision Coverage?

The collision coverage is a part of the own damage component in car insurance. While it secures the vehicle against collision-related damages, it excludes cover for the following losses:

1. Personal accident:

The car insurance collision coverage doesn’t apply to covering accidental injuries of the driver or passengers. For this, you will need to have the personal accident cover with your car insurance.

2. Non-collision damages:

Damages sustained by the insured vehicle due to fire & explosion, and natural or man-made calamities, such as floods, earthquakes, riots and vandalism, don’t fall under the scope of the collision coverage policy. However, they are included under the broader standalone OD and comprehensive car insurance coverage.

3. Theft:

If your vehicle gets stolen, the collision coverage will not cover it. However, theft of the vehicle is covered under the broader standalone OD and comprehensive insurance coverage.

4. Third-party damages:

Accidental third-party injury, death, and property damage are not covered under collision coverage. For this, you will need the mandatory third-party liability cover, which is included with third party car insurance and comprehensive car insurance policies.

Key Factors of Collision Coverage in Car Insurance in India

If you are planning on investing in a car insurance policy in India that features collision coverage, then you must be familiar with its key factors. Here’s what you need to know:

1. Scope of coverage:

The scope of the collision coverage only applies to damages suffered by the insured vehicle as a result of a collision. It pays for necessary repairs and replacements resulting from collision-related damages, even if the fault is yours.

2. Policy choice:

In India, collision coverage is neither available as a standalone policy nor is it available as a collision coverage add-on. It is actually a part of the broader own damage component in car insurance. Hence, it is only offered bundled with the standalone own damage and comprehensive car insurance policies. This means you can’t get the benefit of collision coverage with third-party car insurance, as it doesn’t provide any own damage cover.

3. Requirement:

In India, there is no law that makes having collision coverage compulsory. Usually, investing in a car insurance policy with collision insurance coverage is the choice of the car owner. However, if you lease or finance a car, then the lender may require you to have collision coverage as a mandatory inclusion in your car insurance.

4. Deductibles:

In case of claims under the car insurance collision coverage, note that the insurer doesn’t cover the entire bill. You still have to pay the applicable deductibles before the insurer covers the remaining repair costs in regards to the vehicle’s Insured Declared Value (IDV).

5. No Claim Bonus:

If you file a claim under collision coverage, note that it will cause you to lose your accumulated no-claim bonus benefits. If you want to protect your NCB, then you can consider adding a no-claim bonus protector add-on to your standalone OD or comprehensive car insurance plan.

When is Collision Coverage Recommended?

Unlike the third-party liability cover, collision coverage is not mandatory in India. It is included with the standalone OD and comprehensive car insurance plans, both of which offer extensive own damage coverage for the insured vehicle. If you have the question, “Do You Need Collision Coverage?” on mind, then check out the pointers below :

How to Make A Claim Under Collision Coverage?

To seek compensation for damages under the collision coverage, you can simply make a car insurance own damage claim. Here are the steps you need to follow:

1. Notify your insurer about the collision within the stipulated timeframe.

2. Take photos and videos of the incident and file an FIR (if necessary).

3. Get the vehicle inspected by the surveyor appointed by your insurer.

4. Submit all documents to your insurer, including the claim form, policy details and vehicle RC.

5. Upon approval, get your vehicle repaired at a cashless network garage, and the insurer will settle the bill directly with the garage.

6. For reimbursement claims, you can get your vehicle repaired at a garage of your choice and pay the repair bill upfront. After that, you can submit the documents to the insurer, including original repair bills/invoices, for a reimbursement claim and upon approval, you will receive the applicable compensation.

Conclusion:

The collision coverage is a core benefit of the car insurance policies. It protects your vehicle against own damages caused due to collisions, regardless of fault, mitigating risk and keeping you financially secure. It is an essential component of the own damage section under standalone OD and comprehensive car insurance plans in India. Considering the increasing traffic congestion, it is a wise investment for car owners to maximise vehicle protection and peace of mind.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.

RELATED ARTICLES

Collision Insurance and Comprehensive Insurance for Your Car

Do You Know What is Collision Damage Waiver Car Insurance?

Role of Comprehensive Car Insurance in Protecting Your Investment

All you need to Know about Your Policy Coverage in Case of a Road Accident

---

• 
• 
• 
•