What Does Collision Auto Insurance Cover?
Understanding the collision portion of your auto insurance policy is crucial to ensuring your financial security should an accident occur. Carrying this key coverage can be the difference between keeping or losing your vehicle. Use the information in this article to find out more about what collision auto insurance covers.
Because collision coverage is not a state enforced mandate, many people naively opt not to carry this vital protection, not realizing the many protections which accompany it. Collision insurance pays for damages to your own car, saving you the time of being without a working vehicle and excessive out-of-pocket expenses. Some examples of the coverage provided by collision insurance include:
- If you hit a tree or telephone poll because of slick roads or other weather conditions, your collision coverage will assist you in getting your vehicle repaired.
- There are many drivers who either neglect to purchase liability insurance or allow their coverage to lapse. If you are in an accident with a driver of this kind you will need collision coverage to get your car repaired.
- Most banks will not allow you to obtain an auto loan without collision coverage. They must ensure that in the event of an accident there will be money to pay for damages.
- Some insurance companies offer a rider to the collision portion of your policy called gap coverage. This coverage will pay for the "gap" that can occur when a car is deemed a total loss and the insurance payout is not enough to cover the full amount of your auto loan.
Although collision coverage is subject to a deductible, which is the amount you will need to pay before your insurance company will pay for your vehicle damage, it is a small price compared to the astronomical costs which can result from a serious accident.