Emphasizing the importance of collision insurance points drivers toward the right direction of coverage to invest in. When selecting add-on features, financially stable individuals are quick to overlook this option. Perhaps they believe it does not offer enough incentives.
It’s important to note that this insurance relieves you of the stress and financial burden you may experience behind the wheel. Unexpected accidents result in damages, and when this happens, repairs are imminent. However, including this coverage plan reduces the chances of covering most expenses out of pocket.
Think of it as a security blanket for your car and pocket. If you need this extra shield for your vehicle, this article recommends collision insurance. Read on for more details.
What is collision insurance?
Collision insurance is an auto insurance type that funds the costs of vehicle repairs when an accident occurs. Most providers offer this feature as an extension of auto insurance.
It is important to note that this plan does not cover all damages. For instance, if you incur costs from vandalism or natural disasters, this plan won’t help.
However, if your vehicle hits something that causes damage, CI comes into play. Two points about this plan are necessary to note.
First, a car has to be in motion for an accident to be covered under collision insurance. Then, the object of collision doesn’t necessarily need to be another vehicle.
Also Read: What is accident insurance? Benefits
How does collision insurance work?
For collision insurance to take effect, insurers will assess the type of accident and damages incurred. This process starts only if you already have this insurance and file a claim.
After insurers evaluate the value of damages, the next question becomes who is at fault. If the at-fault driver has liability car insurance that can settle the bills, the burden becomes theirs to bear.
However, if they have low liability limits and you are not under the uninsured motorist property damage coverage, you certainly need collision insurance. For example, if Mr. Kennedy has his Benz damaged in an accident, he’s bound to spend a fortune on repairs.
Fortunately, his add-on policies, like roadside assistance, cover the cost of towing to the repair shop. Insurers expect him to cover bills up to his deductible amount before he can enjoy the benefits of his collision coverage.
If by any chance his car is damaged beyond repair and totaled, collision insurance covers reimbursement. Still, he must exceed his deductible while insurers pay the rest.
What does collision insurance cover?
- Damages from accidents while driving
- Accidents from collisions with cars and other objects
- Potholes damages
Also Read: Commercial Insurance – What it is, types
Benefits of collision insurance
Apart from financial support in the case of an accident, here’s how you can benefit from collision insurance.
Protection for single-vehicle accidents
Normally, you expect at-fault drivers to bear the cost of expenses in an accident. What happens if you get in an accident with an inanimate object?
Collision insurance makes provision for accidents of this sort. Whether you hit a tree, wall, or building, the cost is not yours to bear alone.
Vehicle repair or replacement
Regardless of the extent of the damages, this plan will cover the resulting expenses. If the damage requires repair or a complete replacement, this plan will handle the cost.
Lender requirements
If you ever hope to patronize leasing companies, purchasing this coverage qualifies you for a car loan. Most lenders make it a compulsory requirement if you haven’t completed your loan payment.
Conclusion
In conclusion, collision insurance, albeit expensive, is a crucial feature to add to your vehicle policy. Many people lose out on these benefits due to the cost. However, you can reduce the premium charge by choosing higher deductibles.
