A vehicle if damaged in a collision or accident can get repaired or replaced if the owner has an auto collision insurance cover. This kind of insurance is specifically applied when the owner’s car has met with an accident.
Specific nature of auto collision insurance
Auto collision insurance is commonly mistaken for general car insurance. Auto collision is very specific and a part of the general automobile insurance done by a person. In auto collision insurance the coverage is only for repairing the damaged parts of the insured car that has met with an accident. In case of damages caused by the car on others properties, auto collision insurance does not apply. Again damages caused by weather conditions, vandalism etc is also not covered by the auto collision insurance plan.
How auto insurance policy works?
- One of the main features of this type of policy is that the insurance terms and amounts are designated by the customer and not the company. So the first step in purchasing auto collision insurance is to fix an amount for which the car owner wants to get covered. This is called the policy limit that the company will pay to cover any kind of damage to the car.
- The next thing that needs to be decided is the deductible amount. The deductible amount is the amount that a car owner pays before the insurance companies repay the damages. The greater the deductible amount less will be the auto insurance bill.
- While having a low auto insurance bill can be beneficial but this would also cost the customer more when the car meets with any kind of an accident. So when deciding the deductibles this point should be kept in mind.
- In case the car gets in to an accident then the owner needs to notify the insurance company. Once notified the insurance company first subtracts the deductible amount from the bill and then repays off the rest of the damage cost.
Benefits of auto collision insurance
In most of the countries auto collision insurance is a must for all car owners. When driving a car it is but impertinent that some time or the other the car might meet with an accident causing damages to its parts. An insurance coverage will help the owner of the car to repair the damaged parts with fewer burdens for the bill repayment.
Cars which are new and have parts that are expensive should definitely have auto collision insurance. Cars that are rented too need this kind of specific insurance.
Insurance companies charge premium amounts that need to be paid by the owners of the car. This premium amount covers any kind of damage and repair that the owner might have to face in case of an accident. This kind of insurance is not always mandatory but is beneficial later on.
