When you decide to add optional coverage, you have got several choices. One of them is collision auto insurance. It is not mandatory but some drivers regard this equally important to liability coverage. If liability coverage gives coverage to the third driver when you are at fault in an accident, collision insurance gives protection to you when you are at fault in an accident.
For those who do not yet decide to add collision coverage, this article will be useful for you. Let’s see how it is important and how to deal with it.
How Collision Coverage Benefits to You?
In short, collision or simply called COLL gives coverage for your vehicle that has become damaged when you hit or are hit by third parties’ car or object. It also pays for the car damaged due to flipping or rolling of your vehicle.
It can be concluded that this coverage covers your car when you are at fault at the accident. That is the reason why carrying liability only is not enough to cover anything. Being at fault driver brings consequences for the car damage of our car and third party’s driver.
By carrying collision auto insurance, you are allowed to file a claim to your car insurance company. The car damage will be paid by your company. If you happen to fund deductibles at the beginning of purchasing insurance policy, the payment will be minus the amount of deductibles.
The payout will depend on the terms and condition of the policy. These will include whether the third party is uninsured or underinsured. However, this coverage does not give you full coverage.
Not all car damage will be paid. When your car is burnt in fire or stolen, this kind of loss is not included. Only damages that are triggered by car accident get this.
Why Deductibles are Recommended?
Even though collision auto insurance is indeed useful, there is a consequence that you will get. Adding optional coverage makes your car insurance more expensive. It becomes pricier when the car repair cost is skyrocketing these days.
To reduce the insurance rate, you have to add deductibles as high as possible, as long as you can afford it. These amounts of money are paid based on the deal of certain policy before the company pays the car damage cost.
It seems like you pay your own car damage, not all but part of it. So, the actual cash value of the car is minus the deductibles.
The recommended deductibles of collision auto insurance are $500, but the exact amount will be varied with the range between $100 and $2,500. The amount will depend on the state laws, guidelines of insurance company, and your preferences as well. Make sure you can afford the amount.
The Worst Scenario of Driving without Collision Insurance
A lot of drivers may only choose liability coverage for the car insurance. It might be a good decision if they never get involved in an accident where they are at fault. However, the situation may not be under controlled all the time.
Carrying only liability where you are at fault will require you to pay the car damage for your own pocket, except you get someone else are found liability for your car damages.
More money is even needed when you do not carry collision auto insurance and the damages may exceed the exact value of new car. You even have to consider replacing to a new car. This will apply when you have a new car and you are at fault in an accident without COLL.
However, if you have an old car without loan it or finance it, collision auto insurance is not required. The total damage cost will automatically exceed a lot compared to buying a new one. So, either you need this or not, it depends on your car and preferences.