If you own a car, you need car insurance. But with all the different types of coverage available, it can be tricky to know exactly what you need. Two common types of coverage that often cause confusion are collision insurance and uninsured motorist coverage.
Collision insurance and uninsured motorist coverage protect you in different accident scenarios. While there is some overlap in protection, each covers damages the other does not. Ultimately, most experts recommend carrying both if possible.
Below we’ll explain exactly what collision and uninsured motorist coverage are, what each covers, their key differences, and when you need each type of coverage.
What is Collision Insurance?
Collision insurance covers damage to your vehicle after an accident, regardless of who is at fault. For example, if you crash your car into a telephone pole, collision insurance helps pay for repairs or replacement.
Collision is not mandatory, but your auto lender will require it if you have a loan or lease on your vehicle. Collision is also a good idea for newer cars or cars you still owe money on, as it protects your asset if you total it.
Here’s exactly what collision insurance covers:
- Repair or replacement cost for your vehicle after an accident, regardless of fault
- Damage from hitting an object (e.g. telephone pole, guard rail, animal, pothole)
- Damage from rolling over
- Damage from hitting another vehicle
Collision insurance will pay out up to your coverage limit, minus your deductible. Coverage limits typically match your car’s actual cash value or replacement cost.
What is Uninsured Motorist Coverage?
Uninsured motorist coverage protects you if you’re in an accident caused by a driver with no insurance. It covers injuries to you and your passengers as well as damage to your vehicle.
There are two main types of uninsured motorist coverage:
Uninsured Motorist Bodily Injury (UMBI) – Covers medical costs for you and your passengers after an accident with an uninsured driver.
Uninsured Motorist Property Damage (UMPD) – Covers repair or replacement costs for your vehicle after an accident with an uninsured driver.
Uninsured motorist bodily injury insurance is mandatory in some states. Uninsured motorist property damage is optional everywhere. Some states allow you to buy both together.
Key Differences Between Collision and Uninsured Motorist
While collision and uninsured motorist coverage have some overlap, they are very different. Here are some of the key differences:
|Applies to any covered accident, regardless of fault
|Only applies if an uninsured driver caused the accident
|Covers damage to your vehicle
|Covers damage to your vehicle + medical bills
|Not required by any state
|Required by law in 22 states
|You pay a deductible
|You may pay a deductible, depends on policy
In a nutshell, collision insurance is broader while uninsured motorist is conditional. Collision covers any accident while uninsured motorist only covers accidents caused by uninsured drivers.
When You Need Collision Insurance
Collision insurance provides the broadest protection for your vehicle. Here are some times when it’s especially important:
You have an auto loan or lease – Lenders require collision coverage to protect their asset (the car). If you total the car, collision provides funds to pay off the loan balance.
You have a new or expensive car – Collision makes sense for newer cars or luxury vehicles you want maximum protection for. It prevents having to pay for damages out-of-pocket.
You want peace of mind – With collision insurance, any accident claim goes through your own policy. You don’t have to deal with the other driver’s insurance or argue over fault.
You can afford the premiums – Collision does increase your insurance costs. But for many drivers, the extra peace of mind is worth the price.
You have a high-deductible health plan – If an accident results in injuries, collision provides immediate funds to cover medical care if you have a high deductible to meet first.
You live in an area with many uninsured drivers – Uninsured motorist coverage has gaps. Collision helps fill those gaps if a hit-and-run or uninsured driver damages your vehicle.
When You Need Uninsured Motorist Coverage
Uninsured motorist coverage is required by law in many states. It also provides vital protection in certain situations:
You want to cover injuries – Collision only covers vehicle damage. Uninsured motorist also helps pay medical bills for you and passengers after an accident.
You don’t want to rely on other driver’s insurance – With uninsured motorist coverage, claims go through your policy even if the accident was not your fault. This removes hassles dealing with other insurance companies.
You want hit-and-run protection – Uninsured motorist coverage applies in a hit-and-run where the at-fault driver flees and you can’t identify them.
You drive in areas with many uninsured drivers – In places where many motorists drive without insurance, uninsured motorist coverage is critical protection.
You can’t afford both collision and uninsured motorist – If paying for both would be too expensive, uninsured motorist coverage may be the priority since it covers both injuries and property damage.
You already have medical coverage – If you have ample health insurance and disability coverage, collision may be preferable over uninsured motorist coverage.
Ideal Combination of Collision and Uninsured Motorist
The best protection is to carry both collision and uninsured motorist coverage. They each fill gaps the other leaves:
- Collision covers hit-and-run accidents with untraceable drivers.
- Uninsured motorist covers medical bills from accidents collision doesn’t.
- Collision covers any at-fault accident.
- Uninsured motorist protects against uninsured negligent drivers.
However, both collision and uninsured motoristtogether may be cost prohibitive.
If you can only afford one, prioritize collision if:
- You have a loan/lease or expensive vehicle
- You have ample medical/health coverage
- You want simplicity of claims always going through your own policy
Prioritize uninsured motorist if:
- You don’t have medical/health coverage
- You drive in areas with high rates of uninsured drivers
- You want injury protection for you and passengers
Carefully consider your situation, risks you face, and existing coverage when deciding between the two. An independent insurance agent can also provide advice on prioritizing collision or uninsured motorist based on your unique needs and budget.
The Bottom Line
Collision and uninsured motorist offer overlapping but uniquely beneficial protections. Collision insurance is generally broader while uninsured motorist fills key gaps.
Ideally, purchase both collision and uninsured motorist coverage. Collision protects your vehicle in any covered accident. Uninsured motorist protects you and your passengers from irresponsible uninsured drivers.
But if you must choose just one, think about your risks, assets, and existing insurance coverage. This will help you determine which type of protection is more beneficial for your individual situation.
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