Collision Auto Insurance

It’s pretty common to buy a car on credit. Auto loans are big business, and plenty of people are driving around in cars that they don’t actually own. Auto loans let people get cars that they might never be able to afford. Monthly payments are much easier to handle than shelling out $12,599 all at once.

The problem is, what happens if you’re in an accident? With that kind of outstanding debt, it’s not like you can just run out and buy a new car.

That’s why you get collision insurance.

Auto Coverage For Life’s Little — And Not-So-Little — Accidents

Collision insurance protects your car from damage. Your collision policy pays for expensive repairs. And if your car is “totaled” — as in, it’s a “total loss” — your collision insurance will pay out a cash value so you can replace it.

Collision insurance pays out when you are at fault for the damage. If someone else damages your car, it’s their responsibility to pay for it. Usually, that person’s liability insurance will pay for your damages.

It’s also important to remember that collision insurance only pays for accident-related damage. To protect your car from things like fire and theft, you’ll need a comprehensive policy.

When you take out a collision policy, you generally have a choice of deductibles. The higher the deductible, the lower your monthly premium. A high deductible means you’ll have to pay more out of your own pocket to repair or replace your car. But if you can afford it, a high deductible will save you money on your monthly car insurance bill.

And even though the law doesn’t require you to have collision coverage, the terms of your car lease or financing deal might. They might also require gap coverage — a separate policy that covers the difference what your car is worth and the cost of replacing it.

Think a collision policy is a good idea for you? Talk with an insurance agent. They can help you choose the right policy. Use our free online service to get matched with agents for free quotes.