Collision Insurance

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Collision Insurance Basics

Collision:  To collide.  Not necessarily rocket science, is it?  If you collide with someone or something, you have had a collision.  But, the question is this:  How much damage is there and who’s going to pay for it?  Who is going to reimburse you for the repairs or replacement costs?

Basically, Collision Insurance, which is coverage of those damages to your car resulting from colliding with another car or object.

There are generally two types of collision insurance: Collision Insurance Basics

  • Replacement coverage – you are given a specific amount of money to purchase a vehicle of the same make, model and year of your totaled one.  Wear and tear generally does not come into play here.
  • Actual Cash Value – You’re given a specific amount for the actual value of your car when the collision occurred.

There are also three forms of Collision Auto Insurance according to most states:

  • Limited – Pays for the damage, minus your deductible if the other driver is found at fault.
  • Standard – The basic form which pays for your damages no matter who is at fault, minus your deductible, of course…and
  • Broad – When you get reimbursed for damages to your car and you don’t pay your deductible if the other driver is at fault.

Remember, if you are involved in an accident not due to your fault, your insurance company will do its best to reclaim the costs from the other driver’s insurance.  In that case, they will refund your deductible amount and the chances of there being a change in your premium may be slight.

You see, there’s a rule in collision insurance.  You have to know that you can only take the risks you can handle and make sure you are covered for the ones that you can’t handle.

A few simple rules:

  • Think about how much coverage you will need
  • What options will you have if your car got totaled?
  • Do you need to replace that car?
  • Can you get by with a cheaper car?
  • Look up the book value of your car, minus your deductible and know that this is the most your insurance company is going to pay.
  • If you vehicle is an older one, you don’t want to pay insurance that in total will go above the actual cost of your vehicle.
  • How much coverage do you need?
  • Exactly what does it cover?  (it does not cover the cost of repairs when you take your car into a shop.

It’s important to know that collision insurance is different from liability insurance, which covers damages suffered by others.  Liability insurance is mandatory in many states where collision insurance is discretionary.  So make a sound decision when purchasing it.  Make sure that the amount of your deductible is comfortable for you.  It doesn’t have to be something so complicated that it’s confusing to you.  In fact.  Let’s make it easy for you.  Just put in your zip code and get a free quote.