Collision Coverage
When the Damage Is to Your Own Car
Collision coverage pays to repair or replace your own car after a collision or upset, whether you struck another vehicle or an object. It responds regardless of who was at fault, subject to the deductible you chose. California does not require it, though a lender or lessor almost always does.
How does a collision claim work in California?
The Insurance Code draws the line by cause. Section 660 defines automobile collision coverage as loss resulting from collision or upset, and physical damage coverage as everything else. So hitting a pole, rolling the car, or striking another vehicle sits here. Theft, fire, and a falling branch sit under comprehensive coverage.
Why would collision pay when the crash was not your fault?
More often than people expect, and the clearest case is a hit-and-run where the other vehicle is never traced. Uninsured motorist property damage requires the driver or the license plate to be identified, so an untraced vehicle leaves the damage to collision and the deductible falls on you. The rules behind that sit on the uninsured motorist page.
Where the other driver is identified and insured, your insurer may pursue them for what it paid, and a deductible recovered that way is returned to you. That process takes time and it is not certain, which is why the deductible is a real decision rather than a formality.
How is a total loss decided here?
California sets no fixed percentage. The test is whether the cost to repair the car, added to what the wreck is worth as salvage, reaches its actual cash value. The 70 or 75 percent figures quoted online are carrier practice in other states rather than a California threshold.
Once a car is declared a total loss, 10 CCR 2695.8 governs the valuation, and it is among the most prescriptive rules in the country. The settlement is built from a comparable automobile, which the regulation defines tightly: same manufacturer, same or newer model year, same model type, similar body type, similar options and mileage.
Each comparable must have been available for retail purchase in the local market area within the previous 90 days. It must also be identified by VIN, dealer stock number, or license plate, with the seller's phone number or street address. A valuation you cannot trace to specific cars is not what the regulation contemplates.
What has to be included in the payment?
More than the value of the car. The settlement is the cost of a comparable automobile less your deductible, and it must also include all applicable taxes and the one-time fees for transferring ownership. It must include the license fee and other annual fees, prorated across the remaining term of your registration.
That applies whether or not you actually buy a replacement. If you keep the wreck, the salvage value comes off, and three written disclosures are owed to you. That retaining it must be reported to the DMV. That doing so may affect the car's future resale and insured value. And that you may claim a refund of unused license fees.
Deductions are constrained. Any adjustment must be discernible, measurable, itemized, specified in dollar amount, and documented in the claim file, and a deduction that cannot be supported is not to be used. There is no deduction for condition unless the car is documented as below average for that year, make, and model.
What if the payment will not buy a comparable car?
There is a right here that almost nobody uses. The insurer has to notify you, when it sends the payment or makes its final offer, that you have 35 calendar days to say the amount will not buy a comparable vehicle. Say so, and it has to reopen the file.
It then has to do one of three things. Find you a comparable car at that price in the local market, pay the difference on one you have found, or invoke the appraisal provision in the policy. The exception is where its final offer already identified a specific available car by VIN, stock number, or plate, with the seller's contact details.
Claims regulations are amended periodically. The provisions above reflect Title 10 of the California Code of Regulations and the Insurance Code as published when this page was written.
The deductible is the part you actually choose, and it is worth setting against what the car is worth and how you would fund a repair, rather than against the premium alone. We can price the same vehicle at several deductibles so the trade is visible before you decide.
