Auto Collision Insurance Guides

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What Is Collision Auto Collision Insurance?

Collision insurance is insurance that helps pay for the repair or replacement of a car if it is damaged in an accident with another vehicle or object, such as a fence or a tree. If you rent or finance a car, the lender usually requires collision insurance. If your car is paid for, a collision is an optional coverage on your car insurance policy.

Do I need collision insurance?

We all know that car insurance must be purchased, but by the time of purchase, the creation of all cars and all drivers is unequal. You need different amounts of insurance at different times in your life, and the minimum requirements depend on the state you are in.

An important but sometimes confusing aspect of car insurance is collision insurance. The purpose of collision insurance is to pay for repairs or replacements in the event of an accident, whether involving other drivers or hitting stationary objects such as trees or fences. If an under-insured driver hits your car, it may also help.

While the law does not require collision insurance, if you are buying or renting a car, the lender will generally require you to purchase comprehensive and collision coverage. When the car loan is paid, you can decide to keep or cancel your collision coverage.

COLLISION COVERAGE DEDUCTIBLES AND LIMITS

Collision insurance is deductible, which is the amount you pay before insurance can help you pay off your claim. You can usually choose the amount of collision deduction when you buy insurance.

Depending on your insurer, you may have several deductible amounts to choose from – usually $ 0, $ 500, or $ 1,000. If you choose a lower tax deductible cost, your bonus is likely to increase. Similarly, if you choose a higher deductible, your contribution may decrease. Remember, however, that as part of the claim you will have to pay a deduction from your car repair pocket. So, if you choose a $ 1,000 deduction and your car will be damaged later in an insured accident, you’ll have to pay $ 1,000 to cover the cost of the repair. Typical deductions are usually between 250 and 1000 USD, however the value of the car is an important factor to keep in mind when determining the amount of deduction.

Collision insurance has a limit, which is the maximum amount the policy will pay to cover the claim covered by the insurance. The collision coverage limit is usually the actual cash value of the vehicle (its value minus depreciation).

For example, suppose your car has a total collision. Your insurer would cut off your car depreciation check minus your tax-deductible cost. Remember that “amortized value” means that you may not be able to replace your old vehicle with one of the newer brands and models. To do this, you’ll probably need to use your own money.

WHY BUY COLLISION COVERAGE?


If you owe or rent money to your car, collision insurance is usually not optional; most lenders and tenants require this. If the car is paid, you can choose whether you want to buy collision insurance.

One thing to consider: how much would it cost to repair or replace a vehicle if it were damaged or destroyed by an accident. If you couldn’t afford to fix your car or buy a new one after a wreck, purchasing collision coverage could give you some peace of mind.

Decide how much car insurance to buy

One way to reduce the total cost of buying collision protection is to use the highest deduction that suits your budget. If you plan to use collision protection only in the event of serious damage, you may consider setting a higher deduction, which will help reduce costs.

Your best plan of action is to examine the costs and consider the options. Auto Guides offers a number of car insurance discounts to help you get the best protection at affordable prices. Talk to your insurance agent about your specific situation and he will work with you to add any discounts that you qualify for.

To get insurance to repair or replace a vehicle in the event of an accident, start a free quote for collision car insurance today.