What is Collision Insurance?

Today, we’re going to be talking about Collision insurance. All it took was a moments inattention and you've wrecked your car. Will insurance pay to repair the damage? It will if you include collision coverage in your insurance policy. Collision insurance pays for damage to your own car when you're the one at fault, such as when you run into a tree or when you cause an accident by running a red light. 

But collision coverage can also serve as an all around protection for your vehicle. Even when you're not at fault, you can use it to pay for repairs. Now, while you're waiting for insurers and courts to decide who is at fault. In some States, it can even pay for damage caused by uninsured drivers. When you sign up for collision coverage, you'll need to choose a deductible, which is the amount of money you will have to pay toward your car repairs before your insurance coverage kicks in.

A high deductible means lower monthly premiums, but it also means you'll need more money on hand to get the repair process started. If you finance your car, your lender will require you to get collision coverage. Otherwise, it's optional. As a rule of thumb, we recommend that people buy collision insurance if they can't afford to replace a damaged car without it.

So if your car isn't worth very much anymore, it probably doesn't make sense to pay for insurance to protect it. When you're shopping for car insurance, you will find that collision insurance is usually sold together with its cousin, Comprehensive Insurance, which is similar in many ways, but which pays for damage caused by things other than accidents such as acts of nature, vandalism or theft. I hope you enjoyed this session on everything you need to know about Collision Insurance. So always be sure to contact a professional before making any financial decisions.