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Collision Auto Insurance in Texas

Collision auto insurance in Texas is an auto coverage that pays for repairs or replacing your vehicle if it gets damaged in an accident with another vehicle or stationary objects, like a fence or a tree. If you purchased a vehicle via loan or lease, collision coverage is a mandatory requirement of the creditor. After the debt for your car payment is paid off, collision auto coverage becomes optional in your car insurance policy. Collision insurance protects the insured regardless of who is at fault in an accident.

What is Considered Collision Auto Insurance?

Collision auto insurance in Texas is a type of auto coverage that covers repairs or replacing a vehicle due to damages caused by an accident. An “accident” means a collision with another vehicle or object. In the event of an accident, your collision auto insurance policy can pay for damages caused to your motor vehicle. Although it is not required by law, it is an excellent way to save yourself from unplanned expenses.

What is the Purpose of Collision Auto Insurance in Texas?

The purpose of collision auto insurance in Texas is to cover the cost of repairs or replacing your car after an accident. While the state-mandated liability coverage pays only for the other party’s losses, it does not pay for any of your losses after an accident. This is where collision auto insurance comes in. When you file a claim, your insurance company may pay the costs of repairs or consider the vehicle a total loss and replace it.

What is Collision Auto Insurance for?

Collision auto insurance in Texas is a type of property insurance. It covers any damages to your car after an accident with another vehicle or object. Typical collisions scenarios include:

  • Collision with another vehicle

  • Car flipping over

  • Hitting a stationary object, such as a tree or wall, due to poor visibility

  • A crash because of potholes in the road

What are the Types of Collision Auto Insurance?

Unlike other states, where collision auto insurance is divided into levels of coverage, Texas is an “at-fault” state, so there is just one type of collision coverage. The Modified Comparative Fault (MCF) rule in Texas stipulates that the driver whose level of responsibility for an accident is higher is the one whose insurance covers the event.

Do you Need Collision Auto Insurance in Texas?

While collision auto insurance is not mandatory in Texas, it is essential for car owners to get it. Most importantly, it protects you from expensive repair or replacement of your car after an accident. For example, if you were involved in an accident and were at fault, your state-mandated auto liability insurance policy will only cover the damages caused to the other car. It will not cover the damages done to your car, leaving you to pay for your car replacement or repairs out-of-pocket unless you have active collision insurance coverage in place.

Generally, you need collision insurance if:

  • Your vehicle is financed - (mandatory coverage)

  • You want extra protection - (optional coverage)

Vehicle financing companies make collision insurance a requirement for getting a loan to protect their investment. If the vehicle is damaged, they can repair it, and if it is considered a total loss, the insurer pays off the loan balance. Speak to a Texas-licensed insurance agent for advice on purchasing collision insurance.

Why Do you Need Collision Auto Insurance?

You need collision auto insurance because it can relieve you of the financial burden of repairing or replacing your car when involved in a crash. This is crucial coverage, especially when you are the driver at fault.

How Much Collision Auto Insurance Do you Need?

The collision auto coverage amount you need is based on the value of the insured vehicle. Insurance pays for repairs or replacement of a car based on its value at the time of the accident. You cannot get more or less collision coverage. You either have the coverage, or you do not. The only variable that may affect the amount of collision auto coverage you need is the deductible you choose to implement. Usually, a deductible of up to $1,000 is subtracted from the final claim amount before the disbursement of the funds.

Is Collision Auto Insurance Required by Law in Texas?

No. Texas law does not require vehicle owners to get collision auto insurance.

How Does Collision Auto Insurance Work in Texas?

Collision auto insurance policies in Texas cover damages made to your car due to a collision accident. This type of auto insurance policy serves you and not the other party involved in the accident. Coverage could mean paying for repairs or a replacement depending on the degree of damage. In Texas, collision auto insurance policy covers you as the insured and others listed in the policy. Your policy will also specify what is covered and not covered.

What Does Collision Auto Insurance Cover?

Collision auto insurance covers damages to your vehicle as a result of:

  • Crashing into another car or vice-versa

  • Vehicle flipping over on the highway

  • Crashing into a stationary object like a fence/tree/signpost

What is Collision Auto Insurance Good for?

Collision auto insurance is good for protecting your car in the event of a collision accident. It picks up where the state-mandated liability insurance coverage stops. In an accident, liability insurance covers the bodily injuries and property damage you cause to others, while collision auto insurance covers the damage to your vehicle.

What Does Collision Auto Insurance Typically Include?

Collision auto insurance in Texas covers the damage to your vehicle by paying for repairs or replacing it. The insurer considers many things before deciding if a replacement is better than a repair. But, the rule of thumb is that older car models stand a higher chance of being considered irreparable and must be replaced than newer car models. Newer car models will only be regarded as irreparable if the level of damage is high. If you have unanswered questions about collision auto insurance, seek advice only from state-licensed insurance professionals.

Who is Covered by Collision Auto Insurance?

Collision auto insurance covers everyone named in the policy. If your teenage children are listed in it, your insurer will pay for the damage if they are the drivers in the accident leading to the damage. Collision auto insurance does not cover a person who borrows your car.

What Types of Items Does Collision Auto Insurance Cover?

Collision auto insurance covers any part of your car damaged by collision. If you run into a vehicle and your car’s headlights are smashed while also having a dented hood, your state-mandated liability insurance will only cover the other vehicle. In such a case, collision auto insurance will cover the cost of fixing your car. Other items covered by collision auto insurance include side mirrors, windows, car interiors, tires, and trunks. Your insurer evaluates the damage and decides whether to repair or replace the damaged part.

Sometimes, replacing the whole vehicle is cheaper than fixing damaged parts. In most cases, if the repairs of the vehicle will cost more than 70-80% of the value, the vehicle is considered a total loss. The insurer will pay the insured the car’s current value (minus the deductible) and take possession of the totaled car.

Does Collision Auto Insurance Cover Theft?

No. Collision auto insurance in Texas does not cover theft. Theft is covered by comprehensive auto insurance.

Does Collision Auto Insurance Cover Scratches?

If the scratches on the car are a result of a collision with another vehicle, collision auto insurance covers them. Collision auto coverage works by paying for damage after removing the deductible from the total claim. If the cost of repairing a scratch is less than the deductible, it is better to pay out-of-pocket than file a claim. The more claims you make, the higher your premium gets.

Does Collision Auto Insurance Cover Mechanical Damages?

Collision auto insurance covers mechanical damages caused by accidents. Otherwise, collision auto insurance does not pay for mechanical damages stemming from other causes. You can either pay from your pocket or use your car warranty if it is still valid.

Does Collision Auto Insurance Cover Hail Damage?

No. Hail damage is not covered by collision auto insurance. It is covered by a comprehensive auto insurance policy.

What is not Covered by Collision Auto Insurance?

Collision auto insurance in Texas does not cover any damage not related to an accident, such as a collision with another vehicle or object.

What Does Collision Auto Insurance Typically Exclude?

Risks excluded under the collision auto insurance include:

  • Falling objects

  • Vandalism

  • Theft

  • The impact of natural events, such as hail, flood, and wind

  • Damage to the other vehicle

  • Medical bills incurred from treating injuries caused by an accident

What is the Most Common Use of Collision Insurance?

Collision auto insurance in Texas covers vehicle damage from an accident. After an accident, you must inform your insurer about the incident as quickly as possible so the claim is filed and the process of repairs or total loss reimbursement can begin.

Collision auto insurance is a lifesaver, especially if the car was purchased using a loan (with outstanding repayments) and is totaled in an accident. It relieves you from repaying the loan balance out of pocket.

What is the Difference Between Collision and Comprehensive Insurance?

While collision auto insurance pays for damages caused by an accident, comprehensive insurance (also called other than collision) pays for other damages not caused by accidents.

Some of the named risks in a standard comprehensive Texas auto policy are:

  • Falling or flying objects such as tree limbs, and stones

  • Hail

  • Vandalism

  • Car theft

  • Damage from natural elements such as flood, storm, and wind

If you live in a flood zone, you can use flood insurance to provide flood coverage for your vehicle.

Do I Need Collision Auto Insurance if - FAQ

Do I Need Collision Auto Insurance if I Have Comprehensive Auto Insurance?

Yes, you need collision auto insurance in Texas, even if you have comprehensive auto insurance. Collision insurance pays for the damage from the accident, while comprehensive coverage takes care of non-collision damages.

Do I Need Collision Auto Insurance if I Have Liability Auto Insurance?

Yes, you need collision auto insurance even if you have liability auto insurance coverage on your vehicle. In Texas, liability auto insurance is the minimum coverage required for operating an auto vehicle. While it can pay for the damage you cause other people, it will not cover the cost of repairing your vehicle’s damage, which is why you need collision auto insurance.

Do I Need Collision Auto Insurance if I Have Uninsured/Underinsured Motorist Auto Insurance?

Yes, you do. Uninsured/underinsured motorist (UI/UIM) insurance pays for damages to your car if in an accident:

  • The other driver is at fault

  • The at-fault driver does not have liability coverage

  • The at-fault driver does not have sufficient liability coverage.

However, if you are the driver at fault, your insurance company will not pay for your car damages using uninsured/underinsured motorist coverage. In this case, you need collision insurance to provide coverage. Speak with a Texas-licensed P&C insurance agent for proper clarifications on the type of auto insurance that best fits your needs.

Who Can Get Collision Auto Insurance?

Anyone may get collision auto insurance in addition to liability auto coverage for added protection.

Who Qualifies for Collision Auto Insurance?

Anyone with at least the state-mandated liability coverage qualifies to get collision auto insurance in Texas. Collision auto insurance is purchased in addition to liability insurance.

To qualify for additional coverage, you must first meet the minimum auto insurance requirements in Texas - (30/60/25):

  • $30,000 for the treatment of bodily injury of a single person

  • $60,000 maximum for the treatment of bodily injuries of two or more persons

  • $25,000 for property damage

Who Needs Collision Auto Insurance?

You need collision auto insurance if:

  • Your vehicle is being financed

  • The vehicle’s value is high enough to justify the cost of coverage

Even if you are a careful driver, you have no control over the other drivers using the same road as you, especially in densely populated urban areas. Sometimes, an accident may not be avoidable. Collision auto coverage can help control your risk exposure in such areas.

Who Should Get Collision Auto Insurance?

You should get collision auto insurance if your car was financed and you are still repaying the loan. In case of an accident, you will not have to pay for the damages out-of-pocket. If the car is considered a total loss, the insurer pays off your loan up to the vehicle’s current value. However, if the loan balance is higher than the vehicle’s appraised value, you may owe the difference. In this situation, Gap insurance can cover the unpaid balance if you have one. Otherwise, you may have to cover the difference out-of-pocket or roll the debt over into your next vehicle’s loan.

What are the Benefits of Collision Auto Insurance?

Collision auto insurance in Texas is a safety net for drivers should an accident occur. It can save you the stress of paying out of your pocket for damages done to your car. You can engage the services of any insurance agent licensed in Texas to explain to you in detail what you stand to benefit from having collision auto insurance.

PROs and CONs of Collision Auto Insurance in Texas

Below are the pros and cons of having collision auto insurance in Texas:

PROs of Collision Auto Insurance

  • Collision auto insurance protects you from damages to your car.

  • Without collision coverage, you could be stuck paying for these damages or even out of pocket.

CONs of Collision Auto Insurance

  • While collision auto coverage is not a bad idea, it may be an unnecessary expense, depending on the value of your vehicle. For instance, paying high premiums and deductibles for an old model vehicle may not be worth it.

Always discuss your insurance needs only with licensed insurance professionals, who can give advise based on your situation and needs.

Is it Worth Getting Collision Auto Insurance in Texas?

Collision auto insurance works more like saving for a rainy day. You may never need to use it. But it is of great benefit when the occasion arises, especially if you are still paying for the car or were at fault in an accident.

Out-of-pocket costs to repair or replace a vehicle may be hard to afford without proper insurance coverage. This is why having collision auto insurance is essential in Texas. With nearly 20% of Texas vehicles uninsured or underinsured, it is a1 out of 5 chance that you may collide with such a vehicle. If you think about road congestion in urban areas and the possibility of getting involved in an accident, you will agree that having collision auto coverage is a great idea.

What Happens if you Don’t Have Collision Auto Insurance?

You risk a lot financially when you drive a new or leased car without collision auto insurance. If your car gets damaged, the financial responsibility of fixing the vehicle rests entirely on you. If a financed vehicle is totaled, you will be required to pay off your loan (out of pocket) before you can get a replacement vehicle.

Why is Collision Auto Insurance Important?

Collision auto insurance is crucial if you have a car loan or lease. It protects you from losses you may incur if you hit someone or get hit in an accident, especially by an uninsured or underinsured driver.

What Happens When your Collision Auto Insurance Lapses?

Texas insurance has a grace period of 31 days, so make sure to make your payments on time. If your collision auto insurance lapses, you lose coverage. Your policy does not cover any collision accidents during this period. It means you get to pay out-of-pocket. Make sure you are consistent in paying your collision auto insurance premiums to avoid having a lapsed policy.