What You Need to Know About Collision Coverage in New York State
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The State of New York has strict requirements regarding auto insurance. All drivers are legally required to carry liability insurance that offers $25,000 in coverage for bodily injuries sustained to one person, $50,000 for bodily injuries sustained by two or more people, and $25,000 for property damage. Driving a vehicle without an insurance policy that offers these minimums is against the law and you could end up facing stiff fines and penalties if you are caught.
However, there are other types of insurance coverage besides liability. Collision is one of them.
What is Collision Insurance?
Collision insurance provides you with assistance to pay for any repairs to your vehicle or to replace it if it is damaged in an accident or by another object, such as a tree or a lamp post.
Though this type of insurance is not required by law in New York State, if you taken out a loan to purchase a vehicle or if you are leasing, you will likely be requires to carry collision coverage by your lender. If you own your vehicle, collision insurance is optional.
What Coverage Does Collision Insurance Offer?
Collision insurance will help you pay for the repairs to your vehicle or to replace it in the event that it is damaged by any of the following:
- A collision with another car, truck, motorcycle, or any other type of vehicle
- A collision with another object, such as a tree, a lamp post, a fence, a mailbox, or a building
- A single-car collision in which a roll-over occurs
In other words, if your vehicle becomes damaged or is totaled as a result of any type of collision, your collision coverage will help you pay for the repairs or replace the vehicle.
What Collision Insurance Doesn’t Cover
Collision insurance only covers damages to your vehicle while it is being driven. It will not cover any of the following:
- Damages to your vehicle that are not the result of driving, such as vandalism, theft, or hail (you’ll need comprehensive coverage for this)
- Damages to someone else’s vehicle
- Medical care for you or anyone else
Limits and Deductibles for Collision Insurance
Like all types of auto insurance, collision insurance has a deductible. The deductible is the amount that you are required to pay before your insurance will assist with paying for any claims that are made.
Typically, you will have the option to choose how much you want the deductible to be when you purchase your collision coverage. If you decide that you want a $1,500 deductible and your vehicle is damaged in a collision that your insurance covers, you will be required to pay $1,500 toward the costs of repairs. Only after you pay the amount of your deductible will your insurance kick in and help pay for the rest of the damages, and your insurance provider will only pay for the limit of your coverage.
The limit on your collision coverage is the maximum amount that your insurance carrier will pay for a claim that it covers. Usually, this limit is the actual cash value of your car. For example, if the actual cash value of your vehicle is $20,000, the limit of your collision coverage would also be $20,000. If your vehicle is totaled in a collision that your insurance covers, you will receive a check for the amount of the depreciated value of your vehicle, less your deductible. You can use that money to replace your vehicle, but you will likely need to use your own money to make up the difference if you intend on purchasing a vehicle that costs more than the amount you received.
Why Purchase Collision Insurance?
Though collision insurance isn’t legally required by the State of New York (unless you are leasing or financing your vehicle and your lender requires it), it’s still a good idea to carry this type of coverage.
The roadways in New York tend to be extremely busy, and those that aren’t often have a lot of twists and turns or have steep inclines and declines. Additionally, the weather in the Empire State can be tricky. During the warm weather, sudden torrential rainfall can occur, and during the cold season, snow and ice are common. Traffic, roads that can be difficult to navigate, and challenging weather can make driving very treacherous in New York. As a result, a collision is often unavoidable.
Therefore, to protect yourself financially, it’s wise for drivers in the State of New York to carry collision coverage. Though it will make your insurance more costly, the added cost will benefit you in the event that a collision does occur and you need to make repairs to your vehicle, or it’s totaled and you have to replace it.