Collision Insurance Explained
Collision coverage is a type of auto insurance not required by law. A driver should understand the purpose of collision coverage, requirements, deductibles and how to save money.
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Definition
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Collision coverage pays for repairs to your vehicle after an accident with another vehicle or object. Collision coverage will pay no more than the actual cash value for the vehicle.
Deductible
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After an accident, you will need to pay the deductible before the insurance company will pay for the repairs. To lower the cost of the premiums, you can choose a higher deductible.
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Requirement
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If you finance or lease your vehicle, the lender will require you to have collision coverage.
Tip
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If you have an older vehicle or one that is in poor condition, it may not be advantageous to carry collision coverage.
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