Accidents happen all the time and it could be very frustrating when one is not covered by insurance. There is always some amount of speculation with regard to making a choice between auto collision insurance and comprehensive insurance. To get a better understanding one has to know what this insurance is all about and why it is important.
What is the meaning of auto collision insurance?
As the name suggests, this type of insurance would cover your car in case it is damaged in an auto accident. The insurance covers accidents that happen when it is in motion as well as when it is stationary. Under normal circumstances, the offender will have to pay for damaging a vehicle that is stationary. However, that bit of information is rarely given to anyone and hence this insurance would cover the damage when it occurs. This insurance is suitable for everyone but one must ensure that the value of the vehicle is worth the costs involved in procuring the insurance coverage.
What is the significance of this insurance?
Most of the time motorists forego the auto collision insurance as it would add up to the cost of their premium. However, this is not a wise thing to do. For instance, if one has to own a car which is worth much more than the insurance costs, and if the car is involved in an accident because of your fault then there would be no coverage for the vehicle owned by you. Even in instances where the accident was inevitable the faulty driver would be you. The problem gets compounded when there is no auto collision insurance, as you would be left with no money to fix your own vehicle.
When the vehicle is purchased with an auto loan, it is mandatory to have comprehensive coverage and that would also include auto collision insurance. This is because in case there is a collision the company that has lent the money wants to ensure that you have sufficient money to cover the costs of repair as well as pay off the loan amount or maybe even replace the car.
Different kinds of coverage:
The first option is to get the cost of replacement coverage option, where the cost of replacing is covered when it is totaled. The second option is the actual value of the car where the payment is made through a check based on the value of the car at the time of the crash.
