Collision Auto Insurance
If you’re found at fault in an accident, collision coverage
will pay for damages to your vehicle up to its fair market value.
When you buy a collision insurance policy, you’ll be asked to
choose a deductible. The deductible is the amount you pay for
repairs/replacement before the collision policy takes effect. The higher
the deductible, the lower the collision policy’s cost.
In some cases the repairs can exceed the market value of the car. If
this happens, the insurance company may proclaim your car a “total
loss” and you’ll have to sell it for parts or scrap. To
avoid this risk, you can add gap insurance to your package. Gap insurance
covers the difference between what you need to pay for repairs/replacement
and what your insurance company says your car is worth.
Collision insurance is not mandatory. However, if your car is purchased
from a dealership or financed through a lender, you may be required
by the dealership or the finance company to buy collision insurance. |
