Accidents can happen to anyone and at any time. Even the most careful and skilled driver can still end up being a victim of an auto collision. When a car accident occurs, the damages sustained can be extensive and financially draining. This is where collision insurance comes in.
What is Collision Insurance?
Collision insurance is a type of auto insurance that covers the cost of repairing or replacing your car if it has been damaged in an accident involving another vehicle or object, such as a tree or a fence. Collision coverage typically covers the cost of repairing or replacing your vehicle, minus the deductible amount.
The deductible is the amount that you will have to pay out-of-pocket before the insurance company will cover the rest of the repair or replacement costs.
Collision coverage is optional in most states, but it is highly recommended for those who own newer or more expensive vehicles.
How Does Collision Insurance Work?
When you purchase collision insurance, you will choose a deductible amount. The higher the deductible, the lower your premium will be. In the event of an accident, you will be responsible for paying the deductible amount before the insurance company will cover the rest of the costs.
If the cost of repairing or replacing your vehicle exceeds the value of the car, the insurance company will declare the car a total loss and pay you the current market value of the car.
The total loss threshold varies by state, so it is important to check the threshold in your state.
What Does Collision Insurance Cover?
Collision insurance covers damages to your car that occur as a result of an accident involving another vehicle or object, even if you are at fault. Collision coverage typically covers the cost of repairing or replacing your vehicle, minus the deductible amount.
Collision insurance does not cover damages to your car that occur as a result of non-collision incidents, such as fire or theft. For these types of incidents, you will need to have comprehensive coverage.
Do I Need Collision Insurance?
Collision insurance is not required by law, but it is highly recommended for those who own expensive or newer vehicles.
If you have an older car that is not worth much, collision insurance may not be worth the cost. However, if you have a newer car or a car that is worth a significant amount of money, collision insurance can provide you with the peace of mind that you will not have to pay for expensive repairs or replacement costs out of pocket.
How Much Does Collision Insurance Cost?
The cost of collision insurance varies depending on a number of factors, including the make and model of your vehicle, your driving history, and the amount of coverage you need.
On average, collision insurance can cost between $300 and $900 per year. However, this is just an estimate and your actual cost may vary.
Conclusion
Collision insurance can provide you with the peace of mind that you will not have to pay for expensive repairs or replacement costs out of pocket in the event of an accident involving another vehicle or object. While it is not required by law, it is highly recommended for those who own newer or more expensive vehicles.
Pros |
Cons |
Covers the cost of repairing or replacing your vehicle if it is damaged in an accident involving another vehicle or object. |
Can be expensive, especially if you own a newer or more expensive vehicle. |
Provides you with peace of mind. |
May not be worth the cost if you have an older car that is not worth much. |
Covers damages even if you are at fault. |
Does not cover damages to your car that occur as a result of non-collision incidents, such as fire or theft. |
FAQ
What is the difference between collision and comprehensive insurance?
Collision insurance covers damages to your car that occur as a result of an accident involving another vehicle or object, even if you are at fault. Comprehensive insurance, on the other hand, covers damages to your car that occur as a result of non-collision incidents, such as fire, theft, or natural disasters.
Do I need collision insurance if I have liability insurance?
Liability insurance only covers damages that you may cause to another person or their vehicle in an accident. It does not cover damages to your own vehicle. Collision insurance is recommended if you want your own vehicle to be covered in the event of an accident.
What happens if I don’t have collision insurance?
If you don’t have collision insurance and you are involved in an accident that is your fault, you will be responsible for paying for the damages to your own vehicle out of pocket.
Can I choose my own repair shop with collision insurance?
It depends on the insurance company. Some insurance companies may require you to use one of their recommended repair shops, while others may allow you to choose your own.
Does collision insurance cover rental cars?
Collision insurance typically covers rental cars, but it is important to check with your insurance company to make sure.
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