- Regulations & Driving Rules
What is Collision Auto Insurance
When it comes to car insurance, there are many different options for coverage that an individual has to choose from. One of the types of coverage to consider is collision coverage. Collision coverage helps pay for the repair or replacement of a vehicle after it has been involved in an accident.
What is Collision Auto Insurance?
Collision auto insurance is exactly what it sounds like, coverage for your car if it is involved in a collision. For example, if you rear-end another vehicle, the liability coverage of your insurance policy will pay for the damage to their car. The damage that is done to your car will be paid by your collision coverage, if you have it. You will be required to pay the amount of your deductible and the collision auto insurance will take care of the rest.
Features of Collision Auto Insurance
When signing up for a car insurance policy, you will have the option of collision coverage. It is the insured individual’s responsibility to decide on the limit of the terms of the policy. Insurance companies offer standard coverage limits of $100,000, but you will have a choice to either raise or lower this amount. In addition, you will need to choose an amount for your deductible. Deductibles range from $500 to $5000, depending on your needs.
Collision insurance is helpful if you are ever involved in an accident as it will help pay for the costs of repairs. The insurance company will come to the scene of the accident or wherever your vehicle is and assess the damage. Through this assessment, the insurance agent will determine the costs of repairing or replacing your vehicle. Your deductible will be taken from this amount and the insurance company will pay for the repairs.
Misconceptions about Collision Auto Insurance
While liability insurance is required by law in all states, collision insurance is not. Collision auto insurance is optional and can be added to any car insurance plan if the person chooses. However, if you have a loan out on your vehicle, the company holding the loan may require you to have collision auto insurance on the vehicle until the amount of the loan is repaid.
Benefits of Collision Auto Insurance
Car accidents can happen at any time and normally when you least expect it. This being said, not everyone is prepared for the expenses involved when an accident occurs. Collision auto insurance offers a way to protect yourself if you are involved in an accident. Knowing exactly how much you will have to pay out of pocket should an accident occur, can help you save up the amount of money you need as a cushion should the unexpected ever happen.
Cons of Collision Car Insurance
Unfortunately, there are some cons to this type of coverage. The most significant one is the amount you will have to pay for your premiums. Premiums for collision insurance are typically high. One way to determine whether or not collision insurance is necessary for your vehicle is to consider how much your car is worth. If you are driving a car from the 80s, chances are it is not worth very much and you will be paying more for coverage than your car is worth. However, if you are driving a brand new vehicle, collision insurance can help pay for repair costs and vehicle replacement that you otherwise might not be able to afford.
Rates of Collision Auto Insurance
As with all car insurance, the rates will be determined by a number of factors. Car insurance companies will typically look at your driving record, credit history, age, sex, type of vehicle, and where you live and park your vehicle at night. There are thousands of car insurance companies competing for your business, so in order to get the best rates it will be necessary to shop around.