Collision coverage helps pay for the repair or replacement of your vehicle if it is damaged or destroyed in an accident with another car, regardless of who is at fault. This differs from liability insurance, which has no deductibles for either party when a claim is filed. The deductible is the amount you must pay out of pocket after you file a claim. You can choose your deductible based on the options offered by your insurer, which may be the same for all risks and for collisions.
Generally, the higher the deductible, the lower the premium.Liability insurance covers property damage and injuries to other people after an accident caused by the policyholder, while collision insurance covers damage to the policyholder's vehicle after an accident, regardless of fault. Comprehensive and collision coverage are separate physical damage coverage options, which generally include separate deductibles. For tips on whether liability insurance alone is enough for your situation, check out WalletHub's guide to how much car insurance you can take out. You can also choose to increase your collision deductible to reduce the premium you pay if you don't want to cancel coverage completely.
However, if your car still has market value and you can't afford repairs or replace it, you may want to keep your collision coverage. Collision coverage could pay if you hit another car or object, or if someone else hits your car and you don't have insurance. When deciding whether or not to buy liability insurance, consider the value of your car and your financial situation. When purchased together, these options are often referred to as “full coverage” and can help strengthen an exclusive liability policy. If your car is old and not worth much, you may decide that comprehensive and collision insurance isn't worth it.
The cost of collision insurance varies depending on your driving record, the value of your car and the amount of the deductible. While some call them “collision insurance” and “comprehensive insurance,” these options aren't individual policies, but coverage options that you can add to an existing car insurance policy. Comprehensive coverage is sometimes called “non-collision coverage” because it can cover damage to your vehicle caused by cases other than an auto collision. In some cases, the collision can also repair your car if someone hits you and you don't have insurance or if you are hit by a driver who is on the run. The only car insurance required by law is liability coverage, for damage to someone or something that you accidentally collide with your car.
