What is Collision Coverage Insurance?
What is collision coverage insurance and why do you need it? Collision coverage is a type of insurance coverage that helps pay for all kinds of damages or even the replacement of your vehicle when you are in an accident. This is true even if your car overturns and even if it is your fault, the other driver's fault or when it's not clear who is to blame.
Collision coverage insurance is optional in most cases. However, drivers who are trying to score points on a car loan application may find that collision coverage is mandatory. You will need to pay a deductible for this kind of coverage each time you make a claim.
You might be thinking, 'so what - I am a careful driver, it'll never happen to me!'. Not true! Even the most careful drivers can get into the worst accidents imaginable and they may even be at fault. Collision coverage may be critical in these cases. You may want to ask yourself whether you can afford thousands of dollars to fix or replace your car if it is damaged in a collision. You won't be able to collect from the other driver so you will have to foot the bill.
Collision coverage is one way to protect your car and your finances from Murphy's Law. Even if you feel it's unlikely you will ever need this type of insurance it may be worth the risk if you can afford to buy some extra coverage. When you need it the most your insurance coverage can make all the difference in keeping on top of things financially - but only if you plan for it now.
If you are in an accident and can't come to an agreement with the other driver about whose fault it was - what then? A costly lawsuit can leave your family in financial ruin and amount to millions in the case of a big accident. Collision coverage makes it possible to get your car fixed and leaves your insurer to knuckle down to the legal wrangling.
If the driver who causes the accident has no liability insurance and it's his fault, your collision coverage makes it possible to claim for damages even if you have no uninsured or underinsured motorist coverage in place. That's good news.
The cost of collision coverage depends on the type of car you have and how much it's worth. How much you will be paid out after an accident varies depending on the nature of the accident, how badly your car was damaged if new or used parts were used in the repairs and several other factors. Remember your insurance company is only bound to pay up to your car's cash value.
Later model cars may need a higher deductible on collision coverage. Don't forget that the higher your deductible the lower your premiums are likely to be. It may cost a little more to add collision coverage to your auto insurance package but anything can happen - and probably will!
