What Is Collision Coverage And Do You Need It For Your Car?

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.

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