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Writer's pictureTaylor Burnham

What is Collision Coverage and Will it Make My Car Insurance Rates Go Up?

A photo of a father with his son with a white car in a beach while the sun is setting

Collision coverage is a key part of a car insurance policy that covers the cost of repairs to your vehicle after an at-fault accident or a collision with a stationary object. It’s often paired with comprehensive coverage, which covers non-collision incidents like theft or vandalism. This full coverage ensures that you’re financially protected, regardless of who is at fault.


Louisiana law requires drivers to carry liability coverage on any vehicle they own. This coverage takes care of property damage or injuries you may cause to others in an accident, up to the policy’s limits. The mandatory minimum limits in Louisiana are $15,000 for injury to one person, $30,000 for injuries to multiple people, and $25,000 for property damage.


In Louisiana, drivers are required to have liability coverage for damages or injuries caused to others in an accident. However, liability insurance won’t cover your own vehicle's damages. That’s where collision coverage comes in, protecting you from paying out-of-pocket for repairs.


Factors Affecting Car Insurance Rates


A key factor that affects car insurance rates is your driving record:


Driving Record and Credit Score 


Your driving history plays a major role in determining your auto insurance rates. A clean driving record with no accidents or violations can help you save money, while multiple claims or at-fault accidents will raise your premiums. Insurance companies also consider your credit report, with a good score leading to lower rates and poor credit resulting in higher costs.


Location and Vehicle Type


Where you live impacts your car insurance rates. Auto insurers base rates on your ZIP code, so drivers in cities like New Orleans, where accidents and theft are more common, may pay more. Additionally, high-end vehicles or cars with fewer safety features tend to have higher insurance premiums.


Does Collision Coverage Raise Insurance Rates from an Insurance Company?


Adding collision coverage to your policy might increase your auto insurance premium, but it also protects you from costly repairs after an accident. Most insurance companies consider factors like your driving record, claims history, and vehicle type when calculating your rate. If you're involved in an accident, your insurance provider may increase your rate, but some insurers offer accident forgiveness for eligible drivers.


By comparing quotes and maintaining a safe driving record, you can potentially offset the cost of collision coverage and keep your rates manageable.

Additionally, credit-based insurance scores are used in many states, including Louisiana, to assess risk. Under the Fair Credit Reporting Act (FCRA), insurance companies can pull credit reports, and drivers with poor credit scores may see increased premiums. 


How Location and Vehicle Type Affect Rates


Where you live can affect your insurance premiums due to variations in accident frequency, population density, and theft rates. For instance, residents in densely populated cities like New Orleans may face higher premiums compared to those in rural areas, as the likelihood of accidents is higher.


Moreover, under La. R.S. 32:791, your vehicle's value, safety features, and model also impact the cost of premiums. Insurance companies may charge more for high-end vehicles or those prone to theft.


Do I Need Collision Coverage?


Collision coverage is required if you are still paying off a vehicle loan or lease, as mandated by most lenders to protect their financial interest in the vehicle. Any agreement related to car financing often requires comprehensive insurance coverage, including collision. However, if you own your vehicle outright, you may opt-out of collision coverage, though it’s still advisable for financial protection.


Benefits of having collision coverage


Collision insurance ensures that damage from an accident is covered, regardless of fault. Louisiana operates under a fault-based system, meaning the at-fault party is liable for damages. Collision coverage, however, provides immediate assistance to cover repair costs without waiting for a fault to be established or for the other party's insurance to respond.


How to Save Money on Collision Coverage?


A photo of paperwork involving insurance coverage

Tips for reducing collision coverage costs


One of the most effective ways to reduce your premium is by maintaining a clean driving record, which is rewarded under La. R.S. 22:1457. Additionally, raising your deductible—the amount you pay out-of-pocket before insurance kicks in—can reduce your monthly premiums. Under La. R.S. 22:1269, it's your right to shop for insurance policies, and you should compare rates among providers to find the most affordable option.


The Impact of an Accident on Collision Coverage


Personal Injury Lawyer Taylor Burnham explaining collision coverage to his client

How an Accident Impacts Collision Coverage Rates


In Louisiana, an at-fault accident can raise your rates as per La. R.S. 22:1284. Insurance companies typically raise premiums after an accident because drivers are perceived as higher risk. The severity of the accident will also be taken into account when determining the premium increase.


How long an accident stays on your driving record


Accidents usually stay on your driving record for 3 to 5 years in Louisiana, as governed by La. R.S. 32:414. During this time, insurers can review your records and increase your premiums based on accident history. 


Minimizing Rate Increases After an Accident


After an accident, it's crucial to shop around for new insurance quotes, as insurers may differ in how they handle post-accident premium increases. Some insurers in Louisiana offer "accident forgiveness" as a policy option. This program, which can prevent your rates from increasing after a first accident, may be subject to specific conditions.


How accident forgiveness works


Accident forgiveness is not mandated by law but is offered by certain insurers. It allows policyholders to avoid premium hikes for their first at-fault accident. However, it typically requires paying an extra premium, and there may be restrictions on how frequently it can be used.


Finding Affordable Coverage After an Accident


Tips for finding affordable coverage as a high-risk driver


If you've been involved in an accident and are now considered a high-risk driver, finding affordable auto insurance can be challenging, but it's not impossible. Car insurance rates for high-risk drivers typically increase, but shopping around and comparing insurance quotes from various auto insurance companies can help you find better options. 


In Louisiana, the insurance marketplace is competitive, and some insurers offer policies tailored to high-risk drivers. Additionally, working with an independent insurance agent can help you navigate the market to find policies that fit your needs and budget.


Managing Your Driving Record


How to Check Your Driving Record


Your driving record directly affects your car insurance premiums, so it's important to keep track of it. In Louisiana, you can easily obtain your driving history through the Office of Motor Vehicles, either online or in person. Regular monitoring is crucial since errors in your record could impact your insurance rates. You're entitled to request and review this information.


Importance of Monitoring Your Driving Record


A clean driving record is key to keeping your auto insurance rates low. By checking your record regularly, you can correct any inaccuracies that might result in higher premiums. Keeping your record up to date helps you maintain a safe driving record, which can lead to better car insurance costs and even qualify you for discounts from your insurance provider.


Understanding Your Car Insurance Policy


How Fault Affects Collision Coverage Rates


Louisiana follows a fault-based system, which means that the person deemed responsible for an accident is liable for damages. If you're found at fault, your insurance rates may increase even if you have collision coverage. Some insurers may raise your rates even when you are not at fault, depending on how frequently you file claims.


How to Handle a No-Fault Accident


Louisiana does not operate under a no-fault insurance system, so the at-fault driver’s insurance typically pays for the damages. However, if you have collision coverage, you may still file a claim with your insurer to expedite repairs, but this could potentially result in higher premiums, depending on your policy and insurer.


Getting Car Insurance After an Accident


After an accident, especially if you are classified as a high-risk driver, it’s essential to shop for insurance quotes from multiple companies. The Louisiana Insurance Code, under La. R.S. 22:1454, encourages competitive pricing, meaning different insurers will offer different rates based on their risk assessments. Taking the time to compare rates can help you find a policy that meets your needs without breaking the bank.


Let Us Help You Protect What Matters Most


New Orleans Personal Injury Lawyer Taylor Burnham walking to the Court

Collision coverage is essential for protecting you financially if your vehicle is damaged in an accident. Factors like your driving record, credit score, and the type of vehicle you own can impact your rates At Burnham Law Firm, we know dealing with insurance after an accident can be stressful. 


Contact us today to get clear, straightforward advice and protect your future.

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