What Is Collision Coverage And Do You Need It For Your Car?
Collision coverage is designed to help fix or replace your car in the event of a collision with another or another vehicle, or if your vehicle rolls over. Coverage for another individuals property or vehicle is found under a different policy part, called property damage liability. Coverage for your vehicle for other events, such as theft, fire, or a falling tree, may fall under yet a different policy part, called comprehensive.
Generally, if you’ve taken out a loan to pay for your vehicle or your vehicle is leased, the financial institution will require that you carry collision coverage. If you do not have a loan or a lease, you are probably not required to have collision coverage, but it may still be a good idea. For example: if your vehicle is totaled in an accident, would you be able to replace it out of pocket? The sticker price for a brand new Ford Focus is about $18,000.
If you do want to include collision coverage on your insurance policy, you’ll want to review your deductible options. A deductible is the amount that you would pay out of pocket in the event that the insurance company is paying for a covered loss. For example: if the vehicle requires $5,000 worth of repairs and your deductible is $500, you would pay $500 towards the cost of the repairs and your insurance company would pay $4,500. At Oak Grove Insurance, we typically recommend either a $500 or $1,000 deductible for auto insurance.
Remember — always speak with your independent agent about which coverages are right for you.