Auto collision insurance offers coverage for collision damage costs, when the accident was your fault and you wouldn’t be able to get liability coverage from the other party. It is more like asset coverage. While comprehensive insurance covers most of the natural disasters and unforeseen conditions that are beyond your control and liability insurance will offer coverage when the accident wasn’t your fault, collision coverage would be the right thing to complement them to get all round coverage.
Components of auto collision insurance
There are two important features of the auto collision insurance which are decided at the start. These two parameters are the amount of coverage you will need and the deductible. The coverage will decide what your premium will be. You will have to choose this coverage based on what you will need for your car, in case of a collision. The other parameter is the deductible. This gives the percentage of the damage that you will pay out of your own pocket. Those who are risk averse usually have a lower deductible and go for higher insurance. For a lower insurance premium, you will have to choose a bigger deductible, which means the cost you will have to bear in a collision is higher as well.
Benefit of having auto collision insurance
Auto collision insurance protects you when the cost of the car damage is very high. This is possible not only in an accident but also when there is a collision with an immovable object like a wall, tree or stone. The more expensive the car, the greater will be the damage cost. This is why you need the cushion of this insurance. Another condition is when your car is in a brand new condition. In such a scenario, you will want to have collision insurance because of the relative cost of repairs.
When can you avoid the auto collision insurance?
If your car is old and repairs do not really seem worth their cost, then you can get rid of auto collision insurance. While you will still have the benefit of comprehensive coverage of liability insurance, you can save on the cost of the collision insurance, if you know another collision wouldn’t really leave your vehicle in any shape. Paying for repairs after a crash would seem worthless and the insurance isn’t good value for the money you will have to pay throughout and you rather pay for it if necessary.
