What is collision coverage?
If you’re shopping for auto insurance, you may consider collision coverage. But do you know what it protect? Collision coverage helps pay to repair or replace your vehicle if it’s damaged or destroyed in an accident with another car, regardless of who’s at fault, that’s different from liability coverage which helps pay for damage to another person’s car from an accident you caused.
After an accident, you are responsible for paying a specified dollar amount toward repairing your own car, that’s called a deductible. And for collision coverage, it can vary. Once you’ve paid your deductible, your collision coverage will help pay to repair or replace your vehicle up to its actual cash value.
If you owe money on your car loan or leisure vehicle, you’re typically required by law to have collision coverage. But if you own your car out right, it’s optional.
You may be thinking if collision coverage is optional, why buy it? Consider this. If you get into an accident involving another car or object, would you want to pay and of pocket to repair your car or even to replace it? If not, then collision coverage may be a good choice.
So now you know that collision coverage can help pay for damages to your car after an accident involving another vehicle, regardless of fault. After you’ve paid your deductible, collision coverage helps pay to repair or replace your vehicle up to its actual cash value.
Collision coverage is typically required if you own money on your auto loan or if you lease your vehicle, but if your car is paid off, it’s optional.
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