Collision coverage is a type of auto insurance coverage. It kicks in if a person is required to pay for damages that are a result of an auto accident. While the other insurance company may pay if an accident is the other driver’s fault, when you are in a collision, the insurance will pay if the other driver has no insurance or if the accident is the fault of the insured. The insured’s insurance company will pay for all repairs and damages to the vehicle. This type of insurance is usually optional unless a vehicle is financed. If the insured still owes money on the car, then they must carry collision insurance.
It is important to do some research before purchasing any type of insurance. There can be significant differences in prices and plans. There are also a few nuances that the average car owner may not understand.
One of these is the types of replacement parts that will be used to repair the vehicle. Most people assume their vehicle will be repaired with new Original Equipment Manufacturer parts or OEM parts. This is actually the exception rather than the rule. Most insurance companies require that reconditioned parts or alternative manufactured parts. This saves the insurance company money. The insurance company is required to return the car to its pre-accident condition.
Putting a new bumper on a car that is seven years old is actually adding value to the car. The insurance company does have to make sure all parts fit the car correctly and do not alter the pre-accident appearance of the vehicle. When researching collision insurance, it is important to ask about replacement parts following an accident. Some insurance companies use only OEM parts, especially if the vehicle is newer or has less mileage.
Having coverage for collisions has several benefits, even if the car is older. Following an accident, it may take time to determine who was at fault. It can take care of repairing the car and then, if it turns out the other driver was at fault, will charge their insurance company for reimbursement of the repair costs. It also covers single-car accidents. This means if a driver runs into a wall or a tree because of a skid on a slick road, their insurance will pay for repairs. This insurance also covers repairs if the other driver is uninsured.
Making sure that you are covered for collisions is a good idea if a vehicle is new or has less than 12,000 miles. It is required if the vehicle is leased or financed. The bank technically owns these vehicles and wants to know their property is protected in case of an accident.
If a vehicle is older, but in great condition, having coverage for collisions will help if there is an accident. If the car runs off the road because of slick roads or the other driver in an accident is not insured, this insurance will pay for all repairs.
Collision coverage costs can vary, so it is a good idea to research and compare both coverage and costs. Check at least three insurance companies before making a decision on collision insurance.