Collision insurance is a type of coverage that pays for the costs of repairing or replacing your car if it is damaged in an accident, regardless of who is at fault. It is not legally required, but it is often included in full coverage auto insurance policies. When deciding whether to purchase collision and comprehensive coverage, it is important to consider the value of your car and the deductible on your policy. Generally, if the cost of the coverage is more than 10% of the value of your car, it may not be worth it.
However, if you have a financed car, you will likely be required to have both collision and comprehensive coverage. If you own your car outright, you have the option to cancel these coverages. This means that you will be responsible for any damage to your vehicle if you are at fault for an accident or if your car is damaged due to an incident beyond your control. When purchased together with liability insurance, collision insurance and comprehensive insurance constitute total coverage, which safeguards you financially in the event that your car is unexpectedly damaged. It is important to note that you must have full ownership of your vehicle in order to cancel collision and comprehensive insurance. Additionally, if you keep your vehicle overnight at home, it can be insured under a family member's policy.
When shopping for car insurance, it is essential to compare different companies and policies to find the best coverage for you. You can also get an exemption from the collision deductible as a supplement to your insurance if you want to avoid paying a deductible in the event of an accident. While comprehensive coverage will apply if your vehicle is stolen, no type of car insurance will cover the theft of personal items from your vehicle. Collision coverage offers additional protection after an accident, but can result in higher auto insurance premiums. Ultimately, it is important to weigh the cost of collision and comprehensive coverage against the value of your car and decide what makes sense for you.