What Is Collision Coverage In Auto Insurance?

Collision coverage is one of the most important types of auto insurance coverage, as it helps to protect you financially if you are involved in an accident. It is one of the three basic types of auto insurance coverage, along with liability and comprehensive. Collision coverage is typically required by lenders if you are financing or leasing a vehicle, and it can help to cover the cost of repairing or replacing your vehicle if you are found to be at fault in an accident.

How Collision Coverage Works

When you purchase collision coverage, you are purchasing a policy that will cover the cost of repairing or replacing your vehicle if you are found to be at fault in an accident. This type of coverage does not cover the cost of repairing or replacing the other vehicle involved in the accident, as that is the responsibility of the other driver’s liability insurance. It also does not cover the cost of any medical bills or property damage that may have resulted from the accident. Collision coverage will only cover the cost of repairing or replacing your vehicle if you are found to be at fault in the accident.

How Much Collision Coverage Do You Need?

The amount of collision coverage you need will depend on the value of your vehicle and how much you can afford to pay out of pocket if you are found at fault in an accident. If you are financing or leasing a vehicle, your lender may require you to have a certain amount of collision coverage in order to protect their interests in the event of an accident. If you are purchasing a vehicle outright, you may be able to opt for a lower amount of coverage, depending on the value of your vehicle.

What Does Collision Coverage Cover?

Collision coverage typically covers the cost of repairing or replacing your vehicle if you are found to be at fault in an accident. This includes damage to your vehicle from a collision with another vehicle, an object, or an animal. It also covers the cost of towing your vehicle to a repair shop, as well as a rental car if you are unable to drive your vehicle due to the accident.

What Doesn’t Collision Coverage Cover?

Collision coverage does not cover the cost of repairing or replacing the other vehicle involved in the accident, as that is the responsibility of the other driver’s liability insurance. It also does not cover the cost of any medical bills or property damage that may have resulted from the accident.

Is Collision Coverage Worth It?

Collision coverage can be an important part of an auto insurance policy, as it helps to protect you in the event of an accident. If you are involved in an accident and found to be at fault, collision coverage can help to cover the cost of repairing or replacing your vehicle. It is important to consider the value of your vehicle and how much you can afford to pay out of pocket in the event of an accident when deciding how much collision coverage to purchase.