While buying an auto insurance policy, it is always advised to know all types of coverage that there are, to make a good insurance policy decision. Insurance policies work best to every individual if it is tailor made to suit that individual’s specific needs. Earlier, it was difficult to obtain such kind of a policy because it would take countless phone calls and company visits to get a policy that both worked and fell within the budget. Nowadays, with tough competition, auto insurance companies provide effective coverage at budget friendly prices, which can be requested through internet.
Collision insurance is a type of auto insurance policy that provides coverage in case of auto collision incidents. Collision insurance has specific properties which provide protection for specific, listed repair and replacements.
What collision insurance can do?
- Collision insurance covers the damages to automobile in the event of a collision
- It provides coverage even if the policy holder is at fault.
- It provides coverage independent of the other driver’s liability insurance. Even if the other driver involved in collision does not have liability insurance, if the policy holder has collision insurance, he is covered.
- It covers repairs, replacements of parts of the automobile and any other costs involved after the collision incidence.
- It is especially beneficial, if the automobile is newly purchased. If the other driver involved does not have liability insurance, and the policy holder does not have collision insurance, then the damages to vehicle may prove to be quite a costly affair.
What Collision insurance cannot do?
- Collision insurance does not cover the automobile for anything except a collision incident.
- It does not provide protection against natural disasters, vandalism, theft and other such incidences.
- It is not much useful to have collision insurance if the vehicle is too old and its value has dropped in the market. The premium and the deductible would be too high for the value of the automobile.
- If the collision is a result of driver’s negligence in maintaining the car and replacing the faulty parts, then obtaining the full amount may be slightly problematic.
The cost of the insurance premium can be reduced in many ways. One definite way is to increase the deductible from the collision insurance coverage. Usually, all insurance companies keep a standard of $500 as deductibles. Deductible is the amount that the insurance policy holder pays in the event of collision, before the insurance money is released. Collision insurance works best when combined with a more general insurance policy like comprehensive insurance.
