Collision insurance coverage insures your car against damage suffered in a collision with another car or object, so it's a good idea to consider adding it to your policy. Here's everything you need to know about collision coverage before deciding if you want to add it as optional coverage to your auto insurance policy.
How Collision Coverage Car Insurance Works
Collision insurance covers damage to your car in the event of an accident. Collision coverage, as a part of your car insurance, helps pay for repairs to your car when you:
What Collision Coverage Does Not Cover
Do You Need Collision Coverage?
To determine if you need collision coverage, multiply the value of the premiums you paid in the last five years. If the result amounts to more than the current value of your car, you do not need collision coverage.
What Is a Collision Deductible Waiver?
One condition exists for the use of a collision deductible waiver: You need to identify the at-fault driver. If the driver flees the scenes, you might end up paying the bill. So, make sure to get as much information as you can from the other driver in case this happens.
To determine if your collision insurance carries a collision deductible waiver, check out your insurance's declaration page where you can find it listed, if you have one. Otherwise, call your insurer and ask. They can tell you if your policy has a collision deductible waiver.
How Much Does Collision Coverage Cost?
The cost of collision coverage on your car insurance depends on the amount you want and how much of a deductible you opt for. While no states require you to carry collision coverage, many lenders make this coverage a requirement when buying or leasing a car.
Deciding on whether to opt for collision coverage on your vehicle depends primarily on the value of your vehicle. While lenders require you to carry collision coverage on cars you still owe on, such as a new car or lease, states do not require you carry this coverage.