Collision Auto Insurance

Have you considered the option of collision auto insurance for your vehicle? It is an option because not every driver can see the need for the extra expense of adding it to their policy. However, collision insurance can more than pay for itself the very first time you use it. This form of auto insurance covers you in the event you hit a vehicle that belongs to someone else, and will cover you if you should hit an inanimate object, an animal or anything else that damages your car.

Collision insurance will pay the amount necessary to repair your vehicle, minus whatever the amount your deductible is. You can choose different amounts for your deductible. In order to keep the amount of your premium as low as possible, you should choose the highest deductible that you think you can afford if and when you have an accident. If by chance the car you are driving is an older model, it may be to your advantage to discontinue this option. The reason for this is that when an older car is involved in an accident and is damaged, the amount that collision insurance will pay is only as much as the cash value of the car.

Your state does not require you to carry collision insurance in order to operate your vehicle, but if you should happen to be carrying a lease or a loan on your vehicle, the lien holder will insist on collision insurance to protect their property.

If your collision automobile insurance policy is a standard one, it will pay for whatever repairs your car needs in case of a collision up to the fair market value of the vehicle. You do need to remember that the fair market value can be quite a bit lower than what it would cost you to actually replace your vehicle, or to pay off the balance on your car loan. If you do have a loan or lease on your vehicle, you are going to need what is known as “gap” insurance, which will compensate you for the monetary difference in the amount you owe on it, and what the vehicle is actually worth.

In a nutshell, collision insurance is meant to safeguard your vehicle from damage in an accident. The insurance will pay for repairs on your vehicle that can run into quite a bit of money. In addition, if you have an accident and total your vehicle, the insurance will pay you the book value of the vehicle so that you can get another to take its place.

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