Automobiles are a vital mode of transportation for millions of people. One of the unavoidable circumstances of driving a car is that you will be around other cars and other drivers. Because we all make different decisions in traffic and have different driving capabilities, collisions do happen.
Driving a vehicle has risks — not only to yourself, but to passengers, pedestrians and other drivers around you — and insurance helps mitigate how much you can be personally affected by those risks. Talk with an independent agent in the Trusted Choice® network who will get to know you, and help you choose the right amount of collision coverage for your unique needs.
The collision portion of your auto policy helps pay the bills when your car suffers damage in a collision with another vehicle or an object, regardless of whether you are at fault.
Collision coverage has two costs: your premium and your deductible. The premium is what you pay to keep the coverage active – usually every six months or every year. The deductible is an amount that you pay up-front before the insurance policy kicks in. The higher the deductible, the lower the premium, but the more you pay in the event of an accident before your insurance company pays.
Deductibles can be $100, $250, $500, $1,000 or more. Once you pay that deductible at the time of repairs, the collision coverage then would pay 100 percent of the bill above the deductible, up to the limit set on your policy.
This answer depends on the car you are insuring, its value, and your budget. Here are some things to consider when choosing your deductible:
Note that if you tend to have fender benders and are at the body shop frequently, your insurance company may actually require you to pay a higher deductible.
Since there are several factors to consider, it is a good idea to get personal assistance from an insurance agent who will provide all of the information you need to make an informed choice.
Many states have laws requiring a certain minimum level of insurance; these states typically mandate liability insurance but not collision coverage. Whether you need collision insurance can depend on the age and cash value of your car, or whether you are paying off a car loan.
Collision coverage settlements are usually based on the cash value of your car prior to an accident. For this reason, if you are driving an old car, it might make financial sense to waive the collision coverage, save the premium and pay for repairs out of pocket.
A collision damage waiver, or CDW, is a type of collision coverage that is sometimes applied to a rental car. The CDW covers damage to the rental vehicle if it is damaged in a collision. While it acts as coverage, a CDW is not insurance; it is a waiver that means the rental company will pay the costs of repairs if the renter causes an accident while driving the rented vehicle. A more common coverage is a loss damage waiver, or LDW, which means the rental company will pay the costs of repairs if the renter is responsible for damage to the vehilce, regardless of cause.
A collision deductible waiver is a rider on a collision coverage policy that covers the deductible if you are hit by a car with an uninsured driver. This waiver is available in some states and must be purchased with your uninsured/underinsured motorists coverage.
An independent member agent in the Trusted Choice network can help you find the right type and amount of coverage at the right price for your budget so you can focus on enjoying the drive. Contact a local agent today and get peace of mind.