Florida auto insurance laws do not require collision insurance. However, if your auto is financed, you will discover that your finance company will no doubt require collision insurance as well as comprehensive car insurance.
So what exactly is collision insurance, and what does it cover? The short answer is that collision coverage pays for damages to your car caused by an accident. It’s companion, comprehensive car insurance also pays for damages to your car.
It is a common belief that collision insurance pays for your damages if you are involved in an at fault accident. While this is true, you can also file a claim for collision if you are not at fault for an accident. For example, you might find yourself in a situation where the at-fault driver does not have property damage liability insurance.
Or, you might be the victim of a hit and run where liability coverage obviously cannot be established. Suppose that a “phantom vehicle” forces you off the road, does not crash into you, but causes you to hit a tree. Collision insurance would cover your damages. And, finally, the at-fault insurance company might just be giving you the run around. If you are in dire straits, you can file a collision claim with your own company instead of waiting for the responsible company. What about your deductible? Yes, you will have to pay it. But your insurance company is obligated to “subrogate” for all damages. That means your company collects from the at-fault carrier which reimburses you for that deductible. Expect a few months delay.
There are potential downsides to filing a claim under your own collision insurance. For example, your policy might allow your carrier to use non-factory, “after market parts”. Generally this does not apply to brand new cars. And, if the prospect genuinely frightens you, you are always free to pay your body shop directly for the difference in cost between original manufacturer and after market parts. With some exceptions, these parts can be used interchangeably with little or no visible difference. Nonetheless, the downside to not having collision insurance on a car you cannot afford to replace is far more hazardous than dealing with after market parts.
Comprehensive car insurance is combined with your collision insurance. Comprehensive covers damages to your car, but from different sources than collision.
Most notably, comprehensive car insurance pays for damages caused by theft. This could include repairing damages to your car after it is recovered, or it could mean paying for the actual value of your car if it is never recovered.
Beware. Notice the term “actual value”. Valuation of your vehicle is not likely the same as what you paid for it, nor is it representative of what you might owe on the car.
Comprehensive car insurance also pays for losses due to flooding or storms, fire, or animals. Falling objects or unavoidable road debris can also be classified as comprehensive losses. Of note, a comprehensive claim should not imply negligence or liability on your part.
Collision and comprehensive, like other non-liability Florida auto insurance coverages, always require a deductible. You select the amount of your deductible. The higher the deductible, the lower the premium. But you should choose that deductible based on the amount you could affordably pay in the event of a claim. If your deductible is so high that you could never afford it, is your insurance policy really offering you the protection that you need?
So, do you need collision insurance and its companion comprehensive car insurance? If you have a finance company, the decision is not yours. If you own the car outright, can you afford to replace it?