What Is Collision Insurance?

By: Gabriel Miller

What is collision insurance? While car crashes themselves are potentially traumatic and deadly, paying for collision damages to a car can cause additional stress and trouble, which is why collision insurance is a must for any driver. Understanding the vital importance of collision coverage is the first step toward protecting your car and your hard-earned cash.

Damaging Collisions

While damage to a car may result from falling rocks or intrusive rodents, collisions with other vehicles cause the bulk of cosmetic and structural damages a car sustains in its lifetime. Enter collision insurance, which covers all damages made to a car in a crash or fender bender with another automobile. Collision insurance not only covers damages your car may suffer as a result of being hit, but also damages resulting from your own errors. That is, whether you smash into a Jeep or a Jeep smashes into you, collision coverage will foot the bill after you pay a negotiable deductible.

The Cost To You

The cost of purchasing collision insurance varies depending on the plan and its provider. Some collision insurance includes clauses that dictate payment for minor health costs, while others are restricted to covering only collisions that happen under certain circumstances. While your ability to negotiate fees may be limited by a specific company's flexibility, opting to pay a larger deductible can drastically cut your premium costs. For example, if you elect to pay a $1,200 deductible every time your car is in a wreck, the insurance provider may be more than willing to cut your premiums. If you want to pay only a small deductible, your monthly premiums will rise.

Who Needs Collision Insurance?

Collision insurance is one of the most important types of car insurance protection, and it may even be required depending on the laws in your state. Car crashes can be psychologically and physically devastating, but it can be hard to find a driver who manages to avoid having one at some point during his life. Beyond damage to body and mind, a collision can wreak havoc on a wallet. Whether you drive a fancy sports car or a duct-taped lemon, it's worth purchasing collision insurance. Don't be afraid to haggle for a good rate, but remember that collision insurance is an absolute must.

Source: life123