What to invest for auto collision insurance is not the easiest decision to make. There are many factors involved, one of them being that until you face a situation, you never believe it could actually happen to you. In such a scenario, you might not really take auto collision insurance as seriously as you should. Here are some simple pointers which will assist your decision making process.
Is it a brand new car?
If your car is just out of the showroom, you will need to invest in auto collision insurance. Damage repair costs for new cars are very high. If you are in the unfortunate scenario of your new car being totalled in an accident, you will need all the coverage that you can get your hands on, not to feel depressed. So, never ever do the mistake of ignoring auto collision insurance if your car is new.
Have you paid back the auto loan?
The rule of thumb states that as long as you haven’t paid back the loan amount on your vehicle, you must have auto collision insurance. This is because of unfortunate scenarios, where the car value depreciates massively due to an accident but you still have a major part of the loan to repair. A lot of insurance companies pay back the remaining loan amount and also give you some excess, if your car is totalled meaning rendered beyond repair after a major collision.
What is your budget?
If you cannot afford to pay your auto insurance premiums every month, then there is nothing much to decide. But you can still shop around online and try negotiating auto insurance rates. That is because, if you have been a safe driver for a consistently long period of time, your expected mileage is not going to be very high and you have another insurance policy, be it for another vehicle or your house, then you can get an unbelievable amount of discount from an auto insurance company.
A higher deductible
If you drive safely and are less likely to make a mistake, you can go for a higher deductible which will reduce the premium you have to pay every month. In case of an accident, where the other part is at fault, your deductible amount will be paid by the liability insurance of the other party, which means you don’t have any costs.
