When buying an auto insurance policy. You may consider some additional coverage they are offering. There are 4 main types of auto insurance coverage. These are auto liability coverage, comprehensive coverage, personal injury protection and collision coverage.
Today, this article will focus on collision insurance. But what is collision coverage? First things first, if you’re looking for auto insurance, considering collision coverage is a must. But how does this coverage work and what does it protect?
Collision coverage is designed to help you pay for the repair or replacement of your vehicle if it’s involved in an accident with another car, regardless of who is at fault. It also helps you pay for damages when you drive into a tree. Or when you cause an accident by running at a high speed. Collision insurance also serves as an all around protection for you and your vehicle. Even when you’re not at fault, you can use it to pay for the repairs.
Take note that this coverage is different from liability coverage. Which helps you in paying the damages you caused to another person’s car. You can click Car Liability Coverage to learn more about this type of coverage.
If you are involved in an accident, you are responsible for paying a specific amount to repair your own car. It’s called the deductible, and for collision, it can vary. Once you finish paying your deductible, the collision you have will pay the repair or replacement of your vehicle up to its actual cash value.
Is Collision Coverage Optional?
Well, if your have a lease car or you owe money on a car loan, it’s typically a requirement by law to obtain collision insurance. But if you own your car outright, it’s optional. In addition if your car comes from finance, the lender will ask you to get collision insurance first. Otherwise it’s optional
Collision insurance is optional but if you think it’s not important, try to consider this. If you involve yourself into an accident with another car, are you willing to pay using out-of-pocket for the damages or to replace it? If you’re not willing, then collision coverage may be a great option for you.
Take note that in some states, collision coverage also pays for the damages caused by uninsured drivers. When signing up for collision, you need to choose a deductible. This deductible in simple words is the amount of money you will have to pay in repairing your car before your insurance policy starts kicking in.
Also a lower monthly premium equals a high deductible. It also means that you need more money on hand in order to get the repair started. We also recommend buying collision coverage, especially to those people who can’t afford to replace or pay for the damages without it. In addition, if your car isn’t worth that much anymore, it probably doesn’t make sense to get insurance to protect it.
Additional Information
Usually most auto insurance companies offer a bundle when you buy auto insurance. The bundle I’m talking about consists of collision coverage and comprehensive coverage. These two coverages are usually sold in bundles or sold together. Actually these two have some similarities, but comprehensive coverage pays for damages caused by natural phenomenon, theft or vandalism. You can check Car Comprehensive Insurance to learn more.
Planning To Remove Collision Coverage In Your Auto Insurance Policy?
Some people are complaining about this type of coverage, and the most common complaint is that it’s expensive and they are trying to save some money. Now, the question is when is the good time to remove or take off the collision coverage?
- Determine the value first
First things first, you need to determine the value of your vehicle before you come up with any decisions. In order to do that, visit a website that can help you in terms of determining the value. There are some great websites out there. Example is “Kelly blue book”, it’s a great website that can help you determine the value of your vehicle. In addition, you can also check “NADA”.
You can also try to check out some local dealership’s websites. You just simply put the year, maker and model, then you can find your vehicle in their garage that has similar mileage with your car. Local dealerships’ websites can be a great indicator in terms of determining the value of a specific car.
Once done and you already know its value. You can now determine if you can afford to remove the collision insurance or not. Always depend on the value of the vehicle and its conditions when deciding to remove the collision coverage or not.
- A car that is 10 years old
Well, back in the day it used to be 9-10 years old. Usually when the age of the vehicle hits 10 years old. We could take the coverage off and never give some second thought.
- Paid-off Loans
Another option when to take off the collision coverage is when you finished paying your car loan. When banks are no longer involved, you’re going to be completely responsible for the damages of your vehicle.