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Car insurance collision coverage is an option, not a requirement, in most states in the U.S. (If you are financing your car, lending institutions require proof of auto insurance collision coverage.) Collision car insurance covers damage to your car, but does not cover the damage to any other car you may hit in an auto accident.
There are many instances, however, when having collision coverage is a tremendous help: when you hit a stationary object and are clearly at fault; when you hit another car and are at fault; or when you are hit by a driver who does not have liability car insurance coverage.
On your policy, car insurance collision coverage typically carries a deductible, which is the amount you pay before the auto insurance company assumes the cost of the repair. Many insured drivers choose a higher car insurance deductible ($500 to $1,000) to keep premiums low.
Auto insurance collision coverage is also more expensive for cars with certain risk factors:
* Very expensive
* Frequently stolen
* Difficult to repair, and/or accident-prone.
The cost of collision car insurance coverage depends greatly on the type of car you own and its fair market value. If your car falls into the category of expensive, accident-prone, easily damaged, frequently stolen, or hard to repair vehicles, your car insurance premiums will be higher. If your car instead rates high on safety and dependability, it will cost much less to insure. When you have an auto accident, the amount of money you are paid to repair your vehicle depends on many factors, including the extent of the damage and the cost of the replacement parts.
Auto Collision Coverage is an option, not a requirement, in most states in the U.S. (If you are financing your car, lending institutions require proof of auto insurance collision coverage.) Collision car insurance covers damage to your car, but does not cover the damage to any other car you may hit in an auto accident.
There are many instances, however, when having collision coverage is a tremendous help:
* When you hit a stationary object and are clearly at fault;
* When you hit another car and are at fault;
* When you are hit by a driver who does not have liability car insurance coverage.
If you drive a new car, you need car insurance collision coverage. If you are financing your new car with a lending company, they will require proof of auto insurance collision coverage.
To keep your premiums low, choose a higher deductible ($500 to $1000). If you have a poor driving record, or your car is older and has lost much of its resell value, you do not need collision coverage.
Typical collision car insurance coverage only reimburses the car owner up to the actual cash value of the vehicle before the accident.
An option some car owners add to their policy (for an extra premium) gives replacement-cost coverage for new or nearly new cars under the collision car insurance coverage.
This option gives the car owner the full cost of replacing the car with a new or very similar car if the car is considered a total loss.
Insurance is a necessity. If you drive, you have to have at least basic liability car insurance. If you are wondering how auto liability insurance works, that is the first step to getting better auto liability insurance quotes because understanding auto liability insurance makes you a more informed consumer. If you own your car outright, you can choose to have liability only coverage and that protects you in case you injure someone else in an accident. If you only have the basic state minimum coverage your auto liability insurance rates will be the lowest possible based on only the type of car you are driving and your driving record. Some companies take credit scores into consideration as well.
If you need basic liability car insurance, first find out what your state minimums are and then get online and get a free quote. Since liability covers medical bills and the bills to repair another car if the accident is your fault, you may find that if you ask, "What is liability car insurance?" with an agent on the other end of the phone the agent will tell you that you need basic liability car insurance at levels higher than the state minimums. That is because, in most cases, if you hit an expensive car your state minimums won't be enough to fix that car and you will be responsible for paying the difference.
|Sheri Ann Richerson|