A person who buys a car with a loan generally is required by the financing company to take a comprehensive automobile insurance policy, which covers all kinds of non regular expenses that you might incur on your car. But the car owner is faced with the biggest expense if his vehicle is involved in a road accident, and in such a scenario the insurance company usually finds a way to give you the minimum amount of money it can get away with, citing various clauses and valuation results.
What is auto collision insurance?
Auto collision insurance is a specific insurance policy which insures you against the damage to your car in a collision that happens while it is stationary or in motion. With the high frequency of automobile accidents nowadays, an auto collision insurance is a wise move even if it costs you a little more. Most comprehensive auto insurance policies do have a collision clause, but some car owners delete that clause from their policy for fear of increased premium amounts, which is not clever at all.
Benefits of auto collision insurance
Usually if a vehicle hits your stationary car, then your vehicle’s damage would be likely to be covered in the offending vehicle’s insurance policy. But the problem is that not all car owners would be totally honest in such a scenario and you might not know the full extent of the coverage you can get. Auto collision insurance covers you even if your vehicle was stationary at the time of impact.
If your car is totally damaged in the collision, the amount of coverage provided by a regular automobile insurance policy might not always be able to cover the full cost of repair or replacement, because the wear and tear of your vehicle will also be taken into account. Auto collision insurance can provide you full coverage for replacing your smashed car or repairing it.
In an auto collision insurance policy, the vehicle owner has the option of paying a slightly higher premium and going for the replacement cost coverage option, or he can reduce his premium amount by selecting the actual cash value coverage option. In the first option, you can get enough money to replace your damaged car with a new one of the same model and vintage, whatever be the depreciation on your old car at the time of the collision. But if want to keep your premium costs low and are confident that you will be a safe driver and stay away from collisions, then the second option can be chosen, in which the insurance company will deduct a certain amount based on how old your car was, its condition and the mileage it had covered at the time of impact.
You might be the safest driver in the world, but auto collisions often are caused due to factors out of your control, so an auto collision policy is something you should always go for after buying a car.
