Collision Insurance covers damage to your vehicle in the event of a covered accident. Collision insurance, unlike liability insurance which only covers damage other vehicles or property, collision insurance will help to repair your vehicle if you are the one at fault in a covered accident.

The combination of both liability and collision insurance coverage will help reduce the risk of having to pay for repairs out of pocket in some vehicle accident situations, after your deductible payment.

Is collision insurance coverage right for you?

Collision coverage is not required by law but it is a smart coverage to have for vehicle owners. Although it is not mandatory most banks and car dealerships require collision coverage for financed or leased vehicles. It can only be purchased with Comprehensive coverage. This is normally referred to as full coverage.

Two kinds of Collision auto insurance: premium vs. deductible

When buying a collision coverage policy, ask your insurance agent about premium and deductible options. Your insurance premium is the amount you pay for the plan. The deductible is the amount you pay out-of-pocket for an auto repair before the insurance company covers the rest.

As one goes up in cost, the other usually comes down. A discussion of your financial goals and driving habits with your insurance agent will help you find the right balance between your premium and deductible.

What should your collision coverage be?

When choosing a deductible, or if you want to purchase collision coverage at all, it’s important to think about the age of your car and how much you think repairs might cost you.

A collision deductible is the amount of money you would be comfortable paying out of pocket if a collision ever caused damage to your car. For example if you were to hit a concrete barrier while trying to park and you had a $500 deductible, you would pay $500 out of pocket for the repairs and your insurance company would handle the rest of the repair costs.