Understanding Collision Car Insurance Coverage

collision-coverage

Collision coverage is a must have for all leased and financed vehicles.

Collision car insurance coverage will help pay to repair damage caused to your vehicle as a result of a collision. This could include damage from an accident where two or more vehicles collide while in motion, or damage caused by another car hitting your car while it is parked. Essentially, anytime your vehicle is damaged as the result of a collision with an object, building or vehicle, the repairs fall under the category of collision coverage.

Most states only require liability coverage, but not collision coverage. This is because liability coverage pays for any damage that is caused to other people or their property whenever you cause an accident, while collision coverage pays for damage to your vehicle. The primary goal of state laws regarding minimum insurance requirements is to make sure that other people and property are covered if they are injured or damaged in an accident that you cause.

From a financial standpoint, it generally makes sense to purchase this type of coverage, however. After all, even minor damage from an accident can be extremely expensive to repair. Rather than having to pay for those repairs out of pocket, if you have collision coverage the insurance company will pay for them for you.

Keep in mind, however, that every insurance policy has a deductible. This is the amount of money that you have to pay for repairs out of your own pocket before your insurance coverage kicks in. Generally, the higher the deductible, the lower the monthly cost of insurance will be.

When deciding how much coverage to carry on your vehicle and which deductible to choose, there are a number of factors that you need to consider. One of the most important is the age, condition and overall value of your vehicle. If your car isn’t in great shape or if it is old and has a relatively low value, you may want to opt out of collision coverage. Instead, you could put the money that you saved on insurance into a savings account to cover any necessary repairs to your vehicle if you are involved in an accident. Chances are the insurance company would just total your vehicle anyway if the value wasn’t high enough to justify the repairs.

Your insurance agent should be able to provide you with some guidance as to which type of coverage is best for your vehicle. Collision car insurance coverage can be beneficial, depending on the age and value of your vehicle.