Auto Insurance Collision Coverage Explained

Don’t Wreck Your Finances: Collision Coverage Explained

Collision Coverage, understand what your auto insurance covers before you wreck your finances!

In 2009 alone, there were more than 210 million licensed drivers on the road. And that number will likely rise over the next few years.

While every driver is different, they all have one thing in common: they need car insurance in order to register their car with the state. But every driver’s coverage needs are different. And while many are fine with basic liability coverage, other drivers prefer more comprehensive protection.

Collision insurance is one of the most important types of auto insurance you can buy. But if you’ve never bought it in the past, you’re probably not sure what it covers or how the policy works.

Here’s what you need to know.

What Collision Insurance Covers

Collision insurance covers the cost of repairs or replacement to your car if it’s damaged in a collision. The collision can be with a stationary object like a fence or a telephone pole or a roll-over accident where your car hits the ground. But it’s most often used to cover damage relating to car-and-car accidents on the road.

Insurance providers base the coverage limits for each policy on your personal needs. But it’s always a good idea to choose a policy that covers the full value of your car.

This helps ensure that the cost of repairs is fully covered. Otherwise, you’ll have to pay for the remaining costs out-of-pocket.

How Collision Coverage Can Save You Money

Legally, drivers are only required to have liability protection. If those drivers get into an accident, their insurance will pay for the damage to the other driver’s property. The full cost of repairs for their personal car isn’t covered.

With a current collision insurance policy in place, your insurance company will pay for those repairs.

Once you pay your deductible, the insurance company will cover the rest. Instead of paying the full cost of repairs at the repair shop, you only pay a portion of them. Depending on the severity of the damage, this could result in hundreds of dollars of savings.

Considering that a dented bumper alone can cost between $400 and $1,500, you may end up making up for the cost of coverage in a single claim. 

What’s Not Covered By Collision Coverage

Collision insurance is a complimentary auto insurance policy, rounding out your coverage to better protect your car. But that doesn’t mean it’s completely comprehensive.

It only covers the cost of repairs or replacement due to a collision.

If your car gets damaged in a flood or a tree limb breaks and smashes the windshield, you’re responsible for paying for the cost of repairs on your own. The collision coverage won’t kick in.

Similarly, it only covers the cost of repairs relating to the accident. Collision policies won’t pay for medical care or damage to another person’s property or car.

Who Needs Collision Coverage?

Collision insurance is ideal for drivers who spend a good amount of time on the road and those who have been in accidents in the past. But it largely depends on the type of car you drive.

If you have a new car that’s still worth several thousands of dollars, collision coverage is a worthwhile investment. The last thing you want to do is pay for repairs out-of-pocket when your car is just a few years old.

But if your car is older or just not worth much at all, collision insurance may not be worth your time.

Think about the current value of your car. Could you afford to pay for the full replacement cost out-of-pocket if it’s totaled in an accident? If the answer is “yes,” you don’t need collision insurance.

But if you’d find the cost of repairs or replacement to be a burden on your monthly budget, it’s well worth investing in the coverage.

Your Insurance Coverage Needs Will Change

The longer you own your car, the more it depreciates in value. This means you’ll need less coverage the older the car gets.

Once you buy collision insurance, reevaluate your coverage needs each year. This way, you’ll avoid overpaying on your insurance bill and can save money year after year.

How to Choose a Good Policy

As with any car insurance policy, you need to choose the right amount of coverage with the right insurance provider.

If you’re happy with your current insurance company, speak with your agent about your options. It’s typically easy to add collision insurance to your existing policy. Just remember it will increase your monthly premiums.

If you’re unhappy with your current provider, start getting quotes from other companies. Pay attention to the way each agent interacts with you. The right one will be attentive to your needs, your budget, and your concerns.

Remember, price is only the beginning. Choose an insurance provider that you’re comfortable working with instead of the cheapest option out there.

The last thing you want to deal with is an unresponsive company when you need to file a claim.

Final Thoughts On Collision

Collision coverage isn’t necessary for you to take to the road. But it can help you save money and keep your car in better condition for years to come.

If you’re looking for quality car insurance at a price you can afford, get a free quote now. Whether you’re looking for basic coverage to let you register your car or want a complete comprehensive policy to keep your car safe on the road, we’re here to help.

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