Auto insurance, like other insurances, is compartmentalized. You will find different types of auto insurance cover offered by various auto insurance companies. But one can hardly find an insurance cover that covers all aspects of car insurance.
Each insurance cover offers compensation on a particular segment. It is up to the driver of a car to determine the type of insurance coverage he needs for his prized possession to get the maximum benefits. One of the important insurance coverage available is the auto collision insurance. Having auto collision insurance cover can be immensely beneficial in the event of your car getting involved in an accident. Collision auto insurance covers losses inflicted to your car by another car accidentally. This accident may happen while your car is on the move or immobile. In both cases the auto collision insurance will pay the damages. If the market value of your car is more than the insurance amount then you should get collision coverage. Most people ignore collision insurance because of the added cost to the premium that they pay for their car insurance.
Collision insurance covers the expenses required to fix the damages to your vehicle minus the deductible you have chosen. It is advised to go for a large deductible in order to keep the premium low. There is no use going for collision insurance if your car is old, because the coverage is largely determined on the cash value of the vehicle your are insuring.
If you have financed your vehicle then a comprehensive coverage that also includes collision insurance, may be required. The financing institution will emphasize on this since they don’t want their asset to be at high risk.
How much the coverage compensates depends on the deductible, the amount you promised to pay upfront. You should decide on the deductible after balancing the amount you are likely to save on the low premium and your capacity to pay big amounts from your pocket. For an instance, if you have agreed to pay a $ 2,000 as deductible and your car needs fixing worth $3,500, the insurance company pays $1500. Irrespective of the lower or higher amount required for fixing the damage, the deductible amount remains the same.
Who all will benefit from the collision coverage? A person has financed or leased his car he may need this cover for his car, because the lender will need that. If one posses a brand new car or one that is as good as new and in excellent condition may need to opt for this coverage. And finally an old car will not be worth insuring for collision coverage and the owner will be well off without this.
