When it comes to buy new car insurance, then its come with many types of insurance and one of them is collision insurance.
In this article, we’ll explain what collision insurance is, how it works, and discuss its advantages and disadvantages to make decisions about your auto insurance coverage.
What is Collision Insurance?
Collision insurance is a type of auto insurance that covers the cost of repairs on your vehicle if it’s damaged in a collision with another car or object. As similar type of insurance means, comprehensive insurance, which covers a wider range of non-collision incidents and the collision insurance focuses on accidents involving your vehicle.
How Collision Insurance Works
When you have collision insurance, here’s how it works:
- Accident Occurs: If you’re involved in a collision, whether it’s with another car or an object like a tree or a pole, you should report the incident to your insurance company as soon as possible.
- Claim Process: Your insurance company will guide you through the claims process. You’ll need to provide details about the accident, and they may send an adjuster to assess the damage to your car.
- Coverage Payment: If the accident is covered under your collision insurance policy, your insurance company will pay for the cost of repairing your vehicle, minus the deductible.
- Deductible: Keep in mind that you’ll need to pay a deductible before your insurance company covers the rest of the repair costs. You can choose your deductible amount when you purchase the policy.
- Premium Impact: It’s essential to note that making a collision insurance claim can sometimes result in higher premium costs when it’s time to renew your policy.
Advantages of Collision Insurance
1. Protection from Collision Damage: The primary advantage of collision insurance is that it protects you from the financial burden of repairing your vehicle after a collision, which can be quite costly.
2. Peace of Mind: Knowing you have collision insurance can give you peace of mind, especially if you drive in areas with heavy traffic or have a history of accidents.
Disadvantages of Collision Insurance
1. Cost: Collision insurance can be more expensive than other types of coverage due to its specific focus on collision-related incidents.
2. Deductible Payment: You’ll need to pay your chosen deductible amount out of pocket before your insurance coverage kicks in, which can be a financial burden at the time of an accident.
Is collision insurance required by law?
Collision insurance is not required by law. However, if you have a car loan or lease, your lender may require you to have collision coverage until the loan is paid off.
Can I choose my deductible for collision insurance?
Yes, you can choose your deductible amount when purchasing collision insurance. Keep in mind that a higher deductible often results in lower premium costs, but you’ll pay more out of pocket if you make a claim.
Should I have collision insurance for an older car?
You should have collision insurance for an older car depends on the car’s value. If the cost of collision insurance exceeds the value of your vehicle, it may not be cost-effective. You can consider dropping it for older cars.
Collision insurance is a type of coverage that can help protect you from the financial impact of repairing cost of your vehicle after a collision. Make sure to consider your car’s value and your budget when deciding to buy collision car insurance.