Collision Coverage

What is collision coverage?

Collision coverage will cover the cost of damages to your car that are a direct result of a car accident that was your fault. If the other party was at fault, then their insurance would cover your auto repair bills.

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Who needs collision coverage?

If your car is worth more than $4000, you should consider this type of coverage. If your car is worth less than this, purchasing collision coverage may not be necessary. Should your car be damaged, a new car could be cheaper than the cost of replacement parts needed. You may pay more in insurance payments and a deductible just to mend your older car, when you could be investing that money in a new car – should you even need to.

How much collision coverage do you need?

As with all types of insurance, you should consider what amount of coverage you can afford. If you need collision coverage, it is better to have enough to fully cover you in order to ease the stress of a possibly traumatic situation.

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How does the deductible for collision coverage work?

In the event of an accident, you should file a claim with your insurance company. Your car will be looked at by a mechanic and an estimate will be made as to how much it will cost to repair any damages. You must pay the deductible you chose when you first purchased your policy before your insurance company will make any payments.

For example, if it will cost $1,000 to fix your car and you have a $250 deductible, then the insurance company will pay the difference – $750 – only after the deductible has been paid in full.

Choosing a lower deductible means you will pay more in monthly payments, but at the time of the accident, you will have to pull less from your pocket to pay for the damages to your car.

Does collision coverage take care of mechanical costs whenever my car goes in the shop?

No. Collision coverage is specifically meant to cover costs incurred when your car is damaged in an automobile accident or another event that is covered by your insurance policy – not for the normal wear and tear of a vehicle or its maintenance.

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