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Auto Collision Insurance and its Importance


Auto collision insurance completes a comprehensive car insurance policy. A complete vehicle insurance policy is composed of the said coverage, liability and personal injury. Not signing up for all three will make it a limited coverage. To understand further, the three kinds need to be defined. Liability coverage will take care of third party losses which include medical bills, damage to property and even wage loss caused by a mishap. Personal injury covers your medical expenses as well as your passengers who were hurt in the car crash. Lastly, auto collision insurance will pay off or reimburse costs of repairs to your vehicle regardless of who is at fault. The damage could be due to a clash with another vehicle or simply bumping onto a plant box. The point is, as long as there is damage to the vehicle, it can be claimed. The insurer may even pay for a new car in case the damaged one is irreparable.

Auto collision insurance is not required by the law and may simply be an addition to liability coverage which is mandatory. Not getting it, however, obviously means you will be shouldering all expenses and that will not make your pockets any happier. Generally, auto collision insurance is an expensive policy. Some opt not to have it especially if their cars are old and already beaten since it would be impractical. On the other hand, an accident insurance will prove to be a good investment for new and high-end cars. In some cases, if your vehicle is amortized or financed, the bank to which it is encumbered will require this coverage.

There are ways, though, to lower your premium rate. It is always good to keep your road violations to zero or at a minimum. This responsible attitude keeps all car insurance costs low. Another way is to increase your deductible. In some countries, this is called participation fee. A deductible is the amount set by the policy owner, and is paid to the insurance company as a share to the repair costs. This means that a higher deductible equals to a lower premium. Like all other insurance products, these factors can help lower your rates: your age, the car you drive, driving records such as mileage and traffic violations (if any) as already mentioned, and the community you live in, among others. It is always best to ask around and study quotes.

This insurance product is important. It could save your sanity and your bank account in case something unexpected happens while you are behind the wheel.