What collision insurance coverage can do for you

What collision insurance coverage can do for you

August 25, 2016
Collision insurance
Source: Shutterstock

With so many types auto insurance coverages out there, it’s important to select the right one for you. If you don’t trust your driving skills, or if you feel that the other drivers in your area are reckless, you should definitely get collision insurance coverage.

What is collision insurance coverage?

Collision insurance is an optional coverage that pays for the costs to repair or replace your vehicle when it is damaged in an accident. This type of insurance comes in really handy if you have a new car or an expensive one. But, if you own an old care, getting it might not be such a good idea.

When do you need collision insurance?

In most states, collision insurance is not mandatory. However, if you lease or finance your vehicle, your lender might require you to purchase this type of coverage. It’s important to note that most companies will not allow you to buy it without also buying comprehensive coverage.

Choosing your collision insurance deductible

The collision deductible represent the amount of money that you have to pay out of your own pocket in the event that a collision damages your car. When you decide the amount of your deductible, it’s important to take into consideration the age of your vehicle, how much you think repairs will cost you, and if you’ll still be willing to pay for the repairs under the amount of the deductible.

Also take into account that a low deductible means your insurance provider will cover most or all the costs. As a result, you will have to pay higher premiums. If you choose a higher deductible, you can lower your premiums and even save money over time, especially if you’re a responsible driver.

Benefits of collision insurance coverage

The benefits of collision insurance are:

  • You won’t have to pay out of your own pocket for repairs that cost way more than your deductible.
  • If your vehicle is damaged beyond any chance of repair, you will be compensated.

Thomas Hookton is a finance journalist, history buff and science fiction connoisseur. Hit him up via email.

Around the web

Join the Conversation

Leave a Reply