What is Car Collision Insurance?

Car collision insurance provides coverage in the event of physical damage to the policyholder’s own auto. The damage must be caused by colliding with another vehicle or inanimate object. It doesn’t matter if you are at fault or not. The insurance company pays for losses that are over the deductible.

When you buy a new car or lease one, collision coverage is required. The insurance protects the loan holder in the event the car is damaged or totaled. The cost of the policy depends on the deductible. There are five deductibles available, $50, $100, $250, $500 and $1,000. The higher the deductible, the lower the premium you will have to pay.

Collision insurance will fix your car if you run off the road and hit something, such as a telephone pole or mailbox. It also covers hit and run accidents, whether on the road or in a parking lot. Icy roads and winter weather make for hazard driving conditions, causing accidents. Collisions happen all the time and the insurance will give you financial protection

If an uninsured driver hits you and it is not your fault, you can file under your collision policy. The damage minus the deductible will be paid for. The company will then go after the other driver and try to get the money back. One thing that is not covered is if you hit or collide with an animal, such a deer or cow. Damage to your car by animals or a bird comes under the comprehensive part of auto insurance, not collision.

Once the car is paid for, you may want to consider dropping the policy, especially if the car is over four or five years old. As the car gets older, the value of the car goes down. The book value is usually the maximum the insurance company will pay out on a claim. Over seven years old, the car’s value is not worth enough to insure.

 Before buying any car insurance, compare companies and coverages to find the best fit for you.