Collision insurance is generally not a mandatory insurance requirement in order to register your vehicle with your state; however, it is more than likely required by a lender in order to get a loan on the car.
Collision insurance covers your vehicle in case of an accident that is your fault. It covers damages to your vehicle up to a set amount that has been previously determined in your car insurance policy. Often times that set amount is the value of the vehicle at the time of the accident, which is considered the actual cash value of the car. You will be required to pay your deductible when you file a claim under your collision insurance.
According to the insurance industry, each driver will end up filing a claim against his or her collision insurance once for every 17 years of driving. If you have never needed to file a claim for an accident, you may be pushing your luck.
Collision is an insurance that will protect a newer or more expensive vehicle and should be a part of your regular car insurance policy. If you are one of those drivers who have not needed to file a claim, you might decide to start comparing auto insurance quotes now on collision before you need it and do not have it.
Older vehicles do not necessarily benefit from carrying a collision policy on them. If the car is worth less than a few thousand dollars, the cost of insuring them with a collision policy may not make financial sense. If you consider how much money you spend on a premium for collision and the cost of your deductible against how much money your insurance will pay out if the vehicle is damaged, you might find it better to save your money and put it in the bank.
Collision insurance will pay for damages to your vehicle’s body, including paint and parts, and to any mechanical damages that are the result of the accident. Say you hit someone from the rear and push in your radiator causing damage to the cooling system, these mechanical parts will be covered under your collision policy.
If you are in an accident caused by another driver who has inadequate insurance coverage to repair your vehicle’s damage, your collision insurance will help you to get your car repaired. The same holds true for accidents that happen when there is no other party involved, such as you hit a fence and do damage to your vehicle.
If you do need to file claims against your collision insurance, you may see a rise in your insurance rates the next time your premium is due. You may need to compare other car insurance quotes to see if your rates have been raised by too much. When you do compare auto insurance quotes, remember to disclose your recent accident.