Female standing beside her car after a collision.

Demystifying Collision Insurance: What Factors Determine the Cost?

Published in Car Insurance

It’s summertime and many Maritimers will hit the roads even more than normal – maybe heading to the beach or perhaps a family road trip. One thing you don’t want to worry about is your car insurance. That’s why we want to break down collision insurance for you in an easy-to-understand way. So, let’s delve into the topic of collision insurance and explore the key factors that impact its cost.

What is Collision Insurance?

Collision insurance is a specific type of coverage included in your insurance policy. If your car is damaged from contact with another vehicle or object (parking post, garage door, road sign), collision insurance will cover the repair cost, depending on your deductible. The benefit of no out-of-pocket expenses (except for the deductible) is the main advantage of this investment.

What Determines the Cost of Collision Coverage on Your Car Insurance Policy?

Your Driving Record

Your driving record is one of the most influential factors determining the collision insurance cost. Insurance companies typically consider your history of accidents and traffic violations. You will likely pay a lower premium for collision coverage if you have a clean driving record with no at-fault accidents or violations. On the other hand, if your driving history reveals a pattern of accidents or violations, your premium may increase as you’re considered a higher risk.

Vehicle Make and Model

The type of vehicle you drive also plays a significant role in determining collision insurance costs. Insurance companies analyze your vehicle’s make, model, and year to assess its safety features, repair costs, and overall risk. Generally, vehicles with higher safety ratings and lower repair costs may attract lower premiums. Conversely, if you drive a high-end luxury car or a sports car with expensive parts, your collision insurance premium may be higher due to the increased risk and potential repair costs.

Your Deductible Amount

The deductible is the amount you agree to pay out of pocket before your collision insurance coverage kicks in. Typically, higher deductibles lead to lower premiums, as you assume more financial responsibility in the event of a claim. However, it’s important to strike a balance between a deductible that fits your budget and a premium that provides adequate coverage. Our expert advisors at Bauld Insurance can help you determine the optimal deductible amount for your situation.

The Driver’s Age and Experience

Your age and driving experience can also affect collision insurance rates. Younger, less experienced drivers are generally considered higher risk due to their limited time behind the wheel. Consequently, insurance premiums for young drivers may be higher. You may qualify for lower rates as you gain more experience and demonstrate responsible driving habits over time. It’s essential to discuss your options with our knowledgeable advisors, who can help you explore available discounts and tailor coverage to suit your needs. For those younger drivers, check out our blog, How Much is Car Insurance for New Drivers?

Your Location and Usage

Where you live and how you use your vehicle can impact collision insurance costs. Urban areas with higher traffic congestion and greater chances of accidents may lead to higher premiums. Similarly, if you frequently use your vehicle for business purposes or long commutes, insurance companies may view it as a higher risk, potentially increasing your premium. On the other hand, if you primarily use your vehicle for personal and leisure activities, you may qualify for lower rates. And as another option, if you are a careful driver and largely stay within the speed limit, you might want to consider usage-based insurance.

Understanding the factors determining the cost of collision insurance can empower you to make informed decisions about your coverage. Your driving record, vehicle make and model, deductible amount, age and experience, location, and usage all contribute to the overall premium. Our Bauld Insurance advisors are committed to assisting you in finding the right collision insurance coverage at a competitive price.

Remember, every driver’s situation is unique, and our expert advisors are here to guide you through the process, answer your questions, and ensure you receive personalized service tailored to your needs. Contact us today, and let us help you confidently navigate the world of collision insurance. Your peace of mind is our top priority!

Learn more about Car Insurance, read Frequently Asked Questions, and Request a Quote Today!