What Is Limited Collision Insurance?

Are you searching for the perfect auto insurance to protect your vehicle? Collision coverage is a popular option that covers damage caused by accidents, but have you heard of limited collision insurance?

This type of coverage can offer a more affordable alternative while still providing protection. In this blog post, we’ll explore what limited collision insurance is, how it works, and whether it’s the right choice for you. Keep reading to learn more!

What is limited collision insurance?

Limited collision insurance is a type of auto insurance that covers damage to your vehicle in the event of an accident, but with some limitations. Unlike standard collision coverage, limited collision insurance only covers specific incidents such as collisions with another vehicle or object.

This type of coverage may be beneficial for those who want protection against costly repairs without paying high premiums. However, it’s important to note that limited collision coverage typically only pays out up to the actual cash value of your car.

Limited collision insurance can also come with a deductible, which is the amount you must pay before your policy kicks in. The higher your deductible, the lower your monthly premium will be.

It’s worth mentioning that this type of coverage varies between insurers and policies. Some companies may offer more comprehensive limited collision options than others. It’s essential to read through all terms and conditions carefully and ask any questions you have before signing up for this type of coverage.

How much does limited collision insurance cost?

Limited collision insurance is a cost-effective alternative to full coverage insurance. However, the cost of limited collision insurance varies depending on several factors such as your location, deductible, driving history and type of vehicle.

Generally speaking, limited collision insurance costs less than comprehensive or full coverage insurance because it only covers damages caused by specific events like collisions with other vehicles or objects. The average annual premium for limited collision insurance can range from $200 to $600 per year.

Your deductible is one of the main factors that influence the cost of your limited collision policy. A higher deductible means lower premiums while a lower deductible means higher premiums.

Driving history also plays an important role in determining the cost of your limited collision policy. Drivers who have a clean driving record are likely to pay less for their policy compared to drivers who have been involved in multiple accidents.

Where you live and what kind of car you drive could affect how much you pay for your policy as well. Some states require higher minimum coverage levels which could increase rates while newer cars often come with more expensive repair costs which may lead to higher premiums.

Getting quotes from different insurers and comparing prices can help you find affordable options when shopping for limited collision policies.

What does limited collision insurance cover?

Limited collision insurance is a type of car insurance that covers damages to your vehicle resulting from a collision with another vehicle or object. However, it only covers specific scenarios.

For instance, limited collision insurance only applies if you are not at fault in the accident. Additionally, this coverage typically has a deductible which means you have to pay out of pocket before the policy kicks in.

Limited collision insurance also does not cover damage caused by hitting an animal or falling objects such as rocks or tree branches. It also doesn’t cover damages due to theft or vandalism.

Moreover, limited collision coverage usually pays for repair costs up to the actual cash value (ACV) of your car. This means that if your car’s ACV is less than what it would cost to fix it after an accident, then you will have to pay out-of-pocket expenses for any additional repairs needed.

While limited collision insurance may provide some protection in certain situations where other drivers are at fault for an accident involving their vehicle and yours – it’s important to understand its limitations and exclusions before deciding whether this type of coverage fits your needs.

How does limited collision insurance work?

Limited collision insurance is an optional coverage that can be added to your auto insurance policy. It works differently from comprehensive and full collision coverage, as it only covers specific types of accidents.

If you are involved in a car accident where the other driver is at fault, their liability insurance will usually cover the damages to your vehicle. However, if they do not have enough coverage or are uninsured, limited collision insurance may cover some or all of the damages up to a certain limit.

The “limited” part of this type of insurance refers to the fact that there are restrictions on when and how much will be paid out. For example, if you cause an accident or hit an object such as a tree or guardrail, limited collision insurance will not cover those damages. Additionally, there may be limits on the amount that can be paid out per incident.

To use your limited collision coverage after an accident occurs, you’ll need to file a claim with your insurer and provide documentation such as police reports and photos of the damage. Your insurer will then determine whether your policy covers the incident and how much they will pay out based on any deductibles or limitations outlined in your policy.

Limited collision coverage provides added protection for drivers who want extra peace of mind when it comes to covering potential damages caused by uninsured motorists or underinsured drivers.

When should you get limited collision insurance?

Limited collision insurance is an optional coverage that you may choose to add to your auto insurance policy. But the question is, when should you get it? The answer depends on a few factors.

Firstly, if you have an older car that is not worth much money, limited collision insurance might be a good option for you. This is because the cost of repairing or replacing an older vehicle can often exceed its actual value.

Secondly, if you are trying to save money on your auto insurance premiums and don’t want to pay for full coverage but still want some protection in case of a collision, then limited collision insurance might be right for you.

Thirdly, if you live in an area with low traffic and minimal risk of accidents or collisions, then limited collision insurance could provide adequate protection without breaking the bank.

But keep in mind that limited collision insurance only covers damage caused by collisions with other vehicles. If your car experiences any other type of damage like vandalism or theft, this won’t be covered under this policy.

Ultimately, whether or not to get limited collision insurance depends on several individual factors such as budget and level of risk tolerance.

Pros and cons of limited collision insurance

Limited collision insurance has its benefits and drawbacks. Let’s take a closer look at the pros and cons of this type of coverage.


One major advantage of limited collision insurance is that it can be less expensive than full collision coverage. This makes it an attractive option for those on a tight budget or who have older cars with lower values.

Another pro is that it covers damages caused by collisions with objects other than another vehicle, such as hitting a tree or fence. This can provide peace of mind when driving in areas where these types of accidents are more common.


The biggest drawback to limited collision insurance is that it only covers damage sustained during specific situations outlined in your policy. If you were to get into an accident outside of those circumstances, you would not be covered.

Additionally, limited collision insurance may not cover all repairs needed after an accident, leaving you responsible for additional expenses out-of-pocket.

Whether or not limited collision insurance is right for you depends on several factors including your budget, driving habits and the age/value of your car. It’s important to carefully consider both the pros and cons before making a decision about which type of auto insurance coverage to purchase.


Ultimately, limited collision insurance can be a great option for those who want to balance coverage with cost-effectiveness. While it may not cover everything, it can provide peace of mind in the event of an accident and help you avoid costly repairs if your car is damaged. However, just like any type of insurance policy, it’s important to carefully consider your needs and budget before making a decision.

By understanding what limited collision insurance is, what it covers and how it works, you can make an informed choice about whether this type of coverage is right for you. Don’t hesitate to speak with a trusted insurance agent or do further research to ensure that you’re getting the best possible coverage at the most affordable price point.

Remember: accidents happen when we least expect them, so having the right kind of auto insurance in place can make all the difference when something goes wrong on the road. So stay safe out there!