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Do I Need Collision Insurance & Other FAQs

The world of car insurance can be confusing. So confusing and frustrating in fact that drivers often settle for a policy they don’t even want and rates they can’t afford just to have their policy in place. The good news is that there is so much information out there now and so many ways to get lower rates you shouldn’t have to settle any more paying rates that are higher than you want for coverage that is less than you want.

Even just understanding the different types of policies and determining which one you need, can be overwhelming. For this reason, it is important to help drivers understand a little bit about collision and other types of car insurance options you have available. Since one of the main questions we hear is “Do I need collision insurance?” we decided to start with this one.

do I need collision insurance

  • Do I need collision insurance? The important thing to find out when you get insurance is which type of policy you should have. From there you can always get more insurance if you want it. The important part is making sure you first meet the requirements of your state and auto lender if the car is financed. Collision is not required by state minimum requirements, but more than likely it will be by your lender. If you are not required to have collision insurance than the choice is up to you, so then it is just a good idea to understand what it is to decide if you want it.
  • What does collision car insurance cover? If you already determined in “do I need collision insurance?” that you do not need this you still may want to consider it. Even if you are required to have it you should still get an idea of what it covers. Some of the details will vary from insurance provider to insurance provider so this is just the basics. Collision auto insurance coverage is what helps covers your expenses if you are involved in a collision, usually whether you are at fault or not. If you are not at fault the other insurance may cover this but either way you should make sure you are covered. This can help a great deal with car repair or replacement expenses, as well as any medical bills you may end up with. However, there are some details that vary from company to company.
  • What does or doesn’t collision car insurance include? In most cases collision insurance only covers an accident in which another vehicle is involved. For anything more extensive you may have to get comprehensive to help cover the difference. For example, if you want coverage in case of hitting a large animal, a structure like a home or other types of personal or public property you would probably still need comprehensive on top of collision coverage. There are however a handful of auto insurance policy providers who include all types of collisions within the collision insurance coverage.
  • Is collision coverage enough for my financed car? More than likely collision insurance is not enough coverage for your financed car. In most cases, you will need collision in addition to comprehensive as well as probably gap insurance coverage. Gap insurance stands for Guaranteed Auto Protection, but could also be described as the policy that helps fill in the gaps on your standard auto insurance policy coverage. If the car you are paying on is worth less than the amount you are paying you will need gap in addition to collision insurance. Gap is what pays that difference if your car is totaled out between what you owe and what the car is actually worth.
  • My car is paid for, so do I need collision insurance? This is up to you and much of it depends on the value of your car and whether or not you have health insurance. If your car is paid off but still in good shape and of some value then having it covered by collision is a good idea. Also, if you do not have health insurance and would be unable to pay your medical bills in the event of an accident in which you are hospitalized then collision could be very beneficial for you.
  • Is comprehensive better than collision insurance? Both policies are different and cover different things. Most drivers do not add comprehensive to their policy if it is not required by their lender. However, this can be a very costly mistake. Assuming your collision insurance policy will take care of things like a collision involving a building can be a rude awakening. Also, comprehensive is what often covers drivers with things like storm damage, theft, vandalism or even “Acts of God.” All of these can be costly issues to deal with out of your own pocket if you do not have auto insurance coverage for them.

Hopefully, you have a better idea from “Do I need collision insurance?” as well as other things. While it still can be a bit confusing to find out what type of car insurance coverage you should have it can be figured out. It is often a good idea to lean towards having too much insurance than not enough.

When you get quotes for different types of car insurance coverages, you may find lower rates then what you have now. This would mean you could have better and more extensive coverage while still paying less for your premiums. Make sure you meet the minimum requirements if your car is financed though, because if not your lender will tack the extra coverage on and leave you with a high bill to pay at the end of your loan.

The best way to find out if you can afford collision insurance? By using just your zip code you can get an idea of what this would cost you. Get started finding out about collision insurance rates today.