Finding the right collision insurance policy for or vehicle can be a tricky process, especially because this kind of coverage sounds to be very straightforward. However, even when it seems like an easy choice, most collision insurance policies tend to be quite limiting and specific about what they cover and what they don’t. Therefore, before purchasing an insurance policy, we should do some research to help us determine whether or not we need this kind of insurance. Besides, collision protection isn’t a requirement at any stage, so we can choose if we want to have it or not.
What Does Collision Insurance Cover?
In order to make an informed decision about collision insurance, we must make sure we really understand what it covers, first. Even when it might sound like a very broad policy, it doesn’t cover every expense of every accident we are involved in. This coverage will take care of the repair costs for damage on your car from accidents you cause, a collision with an object, your car rolling over, and another driver hitting your car.
Now, if we happened to be involved in a car accident where the other driver is at fault, it is their insurance that should pay for the damages of your car. This is what property damage liability insurance is for, and we should file the claim through their insurance company, not ours. If their insurance doesn’t cover all our expenses, then our collision insurance would cover the rest.
How Does Collision Deductibles Work?
Another aspect we should understand about this kind of insurance is how the deductible amounts work. Collision insurance tends to be subject to a deductible amount, typically between $500 and $1,500. This means that our insurance would cover the damages of our car minus the amount of the deductible, which comes from our own pocket.
Many policyholders decide to not purchase a collision policy subject to really high deductibles. This is because I might not be a good investment. Say that you have a car accident and you are at fault, and the repair expenses are lower than the deductible of your policy. It wouldn’t make sense to cover a deductible that is more expensive than the repair costs.
Do I Really Need Collision Insurance?
In order to answer the question of whether you need collision insurance or not, you need to remember that most insurance companies do not offer these policies as stand-alone products. Typically, insurance companies will include collision as part of their comprehensive coverage policies. Therefore, we might have to purchase it anyway, even when we don’t really want it.
However, car owners rarely opt for this kind of insurance, unless they are required to get it as part of a bundle policy. Also, having a loan or a lease that requires collision insurance is a reason why people decide to purchase this kind of coverage.