Do I Need to Choose Collision Coverage?

Collision coverage is pretty straightforward auto insurance coverage to understand— it covers you when your car is involved in a collision with another car or object. Collision coverage includes an auto insurance deductible.

Some people confuse collision coverage with liability auto insurance coverage. This covers damage to other vehicles, not your own in an accident that you cause or are liable for. If you cause an accident, your liability auto insurance coverage pays to repair or replace the car you collided with. Any repairs to your own car would come out of your own pocket. If your car is totaled, and it's your fault, you have to pay to replace it, unless of course you have collision coverage.

This is an optional coverage unless you are leasing or financing your vehicle. But it could save you a lot of heartache if you ever are at fault in an accident. Then, all you would need to worry about is your auto insurance deductible for your collision coverage. You can set your deductible amounts usually at $200, $500, $1000 and $2500 for most auto insurance companies. The higher the deductible, the less you pay in auto insurance premiums.

Collision coverage is very useful, but if your car is extremely old and has very little monetary value, you may decide to forgo collision coverage. Consulting an auto insurance agent will help you to make an educated decision about your collision coverage needs.