Should You Get Collision Coverage?

Selecting the best collision insurance is an important decision when considering auto collision insurance.  New and often older drivers often ask, “What does collision insurance cover?”. While the pros and cons are reasonably straightforward, it is necessary to understand the basics of collision coverage.

Collision insurance is not required by law, and each state has different requirements for collision coverage. If you’re leasing or buying a vehicle, the lending company will require that you purchase both collision and comprehensive insurance. If you own the vehicle then you can decide if you only want auto collision insurance.

You may wonder what good is collision insurance if it does not pay for repairs if you are not behind the wheel at the time of the accident? Collision coverage protects your vehicle against physical damage involving another vehicle or inanimate objects such as mailboxes, posts, potholes, etc. Collision insurance pays for damage that your vehicle sustains.

What Does Collision Insurance Cover?

If you do not have a loan on your vehicle you need to weigh your circumstances to determine if you could cover the loss of your vehicle if it were in a collision. Calculate the value of your vehicle. Many people are surprised at the low value of their vehicle as it depreciates over time. Understanding your vehicle’s worth will help you to know whether you should get collision coverage.  If your vehicle has a high value then auto collision insurance is recommended.  If your car is worth $10,000, then a $500 or $1,000 deductible is a fraction of what it would cost to entirely replace the vehicle. If your vehicle is has a much lower value, say less $3,000, then you may want to consider saving the money for possible future repairs.

Collision Insurance covers the following types of accidents:

  • Hitting a tree, pole or another inanimate object
  • Bumping into a car while backing out
  • Hitting a concrete or metal roadside fence

Determining whether you should get collision insurance requires several questions:

  • Do you live paycheck to paycheck and can you afford the cost of car insurance? It may be worth keeping collision coverage. Is the cost of collision coverage 25% of your vehicle’s value every six months? If so, then it is time to cancel your collision insurance. In 2 years, you will have saved enough to cover the cost of a total write off.
  • What are the chances of you being in an accident and should you get collision coverage? How often do you drive your car? Have you driven for over 10 years without an accident?  Your driving history is a good indication of your risk factor.

Also, you can get your vehicle repaired if the accident is not your fault and you know who caused it. You will need to file a claim against the at-fault auto collision policyholder. Collision coverage only applies when you are at fault or you were involved in a hit-and-run accident.

Auto collision insurance is an important decision for you alone to make. We recommend you get advice from experts. Being well-informed about your own needs and understanding of what collision insurance covers is the first step. It can also save you money when you weigh all options and consider the long and short term consequences.pixa