A Short Guide to Collision Insurance for First-Time Car Insurance Buyers

While liability insurance is mandatory when you cover your vehicle, collision insurance is optional. Its job is to help you pay for the repair or replacement of your car in case of a collision accident. Learn more about it and get some essential tips on how to make the best choice now.

What It Covers

If you get this coverage when buying auto insurance, you will get protection in several ways. You can claim compensation in case you crash your car into another vehicle or a stationary object like a tree or a fence. This is also the case if another car collides with yours. It is important to note that typically it doesn’t matter if your vehicle is moving or not at the time of the collision. If you have parked your car, for example, and someone else crashed their vehicle into yours, you will be entitled to compensation under this coverage.

How Much to Buy

To answer this question, you need to estimate the current value of your car. It is important to note that collision coverage isn’t the cheapest auto insurance component so you should be careful with it. The value of a vehicle at any given time is based on its purchase price which is reduced based on two main factors – age and condition. Nowadays, you don’t have to make complex calculations, but use a specially designed tool which can help you estimate the current value of your vehicle to help you with the car insurance buying process.

When deciding on the optimal collision insurance amount, you should also take into account the fact that gap between the cost of replacing your vehicle and its actual value will grow over time. That is why you may want to secure the option of modifying your overage amount to ensure that you will get cheap auto insurance and appropriate protection at the same time. The other factor to consider is the cost of transportation which you would incur in case you have to live without your car for several days while it is being repaired or while you’re making arrangements to replace it.

Be Careful with the Deductible

Collision insurance always comes with a deductible. This is the amount of money which you have to pay out of your pocket when you make a claim on your policy. One of the major tips for securing cheap car insurance is to increase the deductible so that you can pay a lower premium on this component. When increasing your deductible, make sure that you can afford to pay this amount of your pocket whenever the need arises. You should also consider your own driving history and skills and other relevant factors which would affect your risk of a collision accident.

Last, but not least, you should not forget to compare auto insurance quotes to pinpoint the most affordable deal. If you already have cheap insurance for your home from a particular company, they are highly likely to give you a discount so be sure to get a quote from them too. You should also explore your opportunities for getting other discounts.