What is Collision Auto Insurance?

Collision auto insurance is one of the most important types of auto insurance policies that you can acquire. It is a type of policy that covers damages to your car when you collide with another vehicle or object. In this article, we’ll explore the ins and outs of collision auto insurance, including what it covers, how it works, and how to determine if you need it.

What Does Collision Auto Insurance Cover?

Collision auto insurance covers the physical damage that your car sustains as a result of a collision. This includes damage to your car caused by a collision with another vehicle, a stationary object, or a pedestrian. Depending on the policy, it may also cover damage caused by weather-related incidents such as hail, flooding, or falling branches.

Collision auto insurance typically covers the cost of repairing or replacing your car, up to the limits of your policy. The amount of coverage you have depends on the policy you choose and the deductible you select. A deductible is the amount of money you are required to pay out of pocket before your insurance kicks in.

What Does Collision Auto Insurance Not Cover?

Collision auto insurance does not cover damage to another person’s car or injuries they suffer as a result of a collision. For that, you’ll need liability insurance. Collision auto insurance also does not typically cover mechanical failures, wear and tear, or damage caused by acts of nature like flooding or earthquakes.

It’s important to read your policy carefully to understand what it does and does not cover.

How Does Collision Auto Insurance Work?

Collision auto insurance works by providing you with financial protection when your car is damaged in a collision. When you have a collision, you’ll need to file a claim with your insurance company. Your insurer will then send an adjuster to inspect the damage and determine the cost of repairs or replacement.

If the cost of repairs or replacement is less than your deductible, you’ll be responsible for paying the entire amount out of pocket. If the cost of repairs or replacement is more than your deductible, your insurance will cover the difference up to the limits of your policy.

Once your claim is approved, your insurance company will either pay for the repairs or send you a check for the value of your car if it’s determined to be a total loss. If you’re still making payments on your car, your insurance may also pay off your auto loan.

How Do You Determine If You Need Collision Auto Insurance?

Whether or not you need collision auto insurance depends on several factors, including the age and value of your car, your driving history, and your financial situation.

If your car is relatively new or has a high value, collision auto insurance is generally a good idea. The same is true if you’re a new or inexperienced driver, as you may be more likely to get into an accident. If you’re financially stable and can afford to pay for repairs or a replacement car out of pocket, you may be able to forgo collision auto insurance.

FAQs

Overall, collision auto insurance is an important type of coverage that can provide you with peace of mind and financial protection when you need it most. By understanding what it covers, how it works, and how to determine if you need it, you can make an informed decision about whether or not to add it to your auto insurance policy.