Understanding Renter's Insurance Plans Understanding Renter's Insurance Plans

Are you shopping for auto insurance for your vehicle, and not sure if you need to get collision coverage? If so, these things will help you better understand what you get with collision coverage. 

Collision Coverage Gives Protection Regardless Of Fault

The main reason you'll want collision coverage is that it will help repair your car regardless of who's at fault. Common situations where you'll have coverage include if you cause an accident with another driver and if you damage your own vehicle by hitting an object. You'll even have coverage if a tree were to fall onto your vehicle where nobody is really at fault for causing the damage. 

Collision Coverage Might Be Mandatory

There are some situations where it may be required to have collision coverage, so you'll need to have it no matter what. This is often the case when you are leasing your vehicle since the car does not belong to you and you are only borrowing it. If you have a loan on your vehicle, the terms of the loan may state that having collision coverage is necessary until the loan is paid off. If you need to get an auto title loan, the loan provider may have a requirement that the vehicle is covered with collision coverage. 

Collision Coverage Requires Paying Your Deductible To Use

Simply paying for collision coverage is not going to be enough if you have to use it. You must pay your deductible before insurance pays for the rest of the damage, which could either be a very small or large amount depending on the deductible you picked. Consider how much your deductible is before you decide on getting collision coverage since a large deductible might discourage you from actually using your collision coverage.

Collision Coverage Is Worth Up To Your Vehicle's Actual Cash Value

While you may assume that collision coverage is going to help repair your vehicle if something is wrong with it, know that this is not always true. Collision coverage will give your vehicle coverage up to the actual cash value of your vehicle. If the damage you sustain exceeds the cash value of your vehicle, it may be considered totaled and you'll be given the value of the car. 

Still unsure about getting collision coverage? Meet with an auto insurance agent in your area for more information since they'll be able to tell you exactly what is and is not covered.