What is collision coverage?

If you currently have collision coverage or thinking about adding it to your auto insurance policy, it is important to know how collision coverage indemnifies you in the unfortunate case of an accident. So let’s say you are in an accident with another vehicle, or an object, or maybe your car overturns (not so unusual in extreme weather states) the collision insurance coverage then kicks in – paying for the covered damage to your vehicle.

How much do you get back to pay for damages when collision coverage is applicable? The maximum amount you’d get is the actual cash value of your vehicle minus the deductible you chose with the coverage.

So – if your car is worth $5,000 and you have a $600 deductible , the max you will receive for damages is $4,400. Simple right?

Here’s some random, yet important facts about collision insurance coverage:

  • Collision and comprehensive coverage are usually required if you have a loan or lease on your vehicle.
  • Don’t choose a high deductible plan if you could not afford the out-of-pocket cost in the event of a car accident.
  • To have collision coverage added to your policy, you must purchase comprehensive coverage.
  • Collision Coverage and limits may vary by state. Enter your zip code to choose an affordable a plan for you.

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