What is Collision Coverage Insurance?
Collision coverage you might have heard of it but what is it? First off, what exactly is collision coverage? Is collision coverage mandatory, and how do the deductibles work? Let’s take these one by one. Here are the details of collision coverage. Previously we have already discussed about Answer What Is Comprehensive Insurance? please be listened to.
Collision applies specifically to damages to your vehicle. Collision coverage is going to pay for any physical damage caused to your vehicle when you hit or are hit by another vehicle or object. Collision will even cover you if you unintentionally roll or flip your vehicle.
Once you pay a deductible, collision coverage will cover the remaining costs of damages to your vehicle regardless of whether the accident was caused by a single vehicle or multiple vehicles automotive or property.
See this illustration! You’re driving home from work on the way you skid off the road and hit a tree, you’re not injured but your vehicle is damaged. That’s what collision coverage is for. Your coverage helps pay for damages to your vehicle in cases where your car hits another vehicle or object. Your car is hit by another car, your vehicle rolls over and one more thing to keep in mind. Collision coverage is usually required if your car is leased or financed.
When to Drop Collision Insurance?
The actual replacement cost value of your car, you can do this pretty easily through the NAD a guides Kelley blue book or the black book. Be realistic, look at the condition of your vehicle including the dents the sun damaged the upholstery and the mileage or you can call your insurance company.
See how their claims department determines the actual cash value in your area. A good way to decide whether or not you need collision insurance is to look at the policy or look at the Blue Book value. Determine the value of the car, subtract the deductible on the policy from the vehicle replacement cost. The remaining amount would be the actual benefit of carrying that coverage.
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Now consider the annual premium you pay you got to divide this number by the actual benefit of the policy. They would take before the total premiums paid would surpass the actual replacement cost of the vehicle.