Collision Insurance

Categories: Insurance

Isn't all car insurance "collision insurance?" There's just theft insurance and collision insurance, right?

Not quite. If you get in an accident, two types of coverage can come into play. One is liability insurance. This covers the damage you do to other people. The other is collision insurance, which covers the damage done to your own vehicle.

If the accident was someone else's fault, their liability insurance will cover your damage. However, if you cause the accident, or they don't have insurance, or if the authorities judge that the blame for the accident is split in some way (say, 50% you, 50% them), then you might be responsible for at least a portion of your own repairs. With collision insurance, the insurer will pick up the costs, minus whatever deductible you have in place.

Liability insurance is the type of insurance that most states require a driver to have. Collision insurance is typically optional. Whether you carry it or not will depend on your auto insurance budget and the value of your car. If you have a real hooptie, it might not be worth the additional insurance. However, if your car is the type that has to be shipped back to Frankfurt in order to do an oil change, then get as much insurance as they are willing to sell you.

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