Collision Car Insurance

Car Insurance - Collision

Collision Insurance - Making sure the other guy is covered is one thing but what if you would like your car fixed if you are determined to be at fault in an accident? That is where collision insurance for your car takes over.

Collision insurance is not required except for when you are financing a car. In order to obtain vehicle financing lenders typically require (as a part of the loan contract) that the car be covered by collision and comprehensive insurance to protect their investment. None-the-less it is a good idea to have collision coverage on your vehicle if it still has value.

When signing up for collision insurance you will need to choose a "deductible" level. The deductible is the amount of money that you are initially responsible for in the case of an insurance claim. In other words let's say you have own a vehicle that has the fair market value of $5,000.00 and the car is totaled in an accident. Your insurance company would cover the fair market vehicle value minus the deductible amount. In this case:

$5,000.00 - Fair Market Value of Automobile

$1,000.00 - Collision Auto Insurance Deductible

$4,000.00 - Amount Covered (or Paid) by Insurance

A deductible is usually available in amounts of $250.00, $500.00 and $1000.00. The higher the deductible amount the less your collision coverage will cost you.