Once your purchase basic car insurance, you have to decide what does Collision insurance cover and if you really need it.

For many car owners, Collision Coverage is the necessary added monthly fee that could help you avoid a costly repair bill in the future. For other owners, collision coverage is a waste of money and should be avoided. Even if you have cheap liability insurance coverage, you have to pick the best option for your situation. Let’s review the choices.

What Does Collision Insurance Cover?

Collision coverage pays out to cover the damage that your vehicle sustained in an accident, regardless of which driver is at fault. The coverage you receive largely depends on certain factors about the car. Collision Insurance also pays if you caused the accident. It is a great way to fix a car that is damaged in an accident. Damage from driving on potholes is also covered, as well as being the victim of a hit-and-run accident.

Comprehensive insurance covers other types of damage to your car, such as mother nature, animals, fire, and vandalism. Some people like to purchase both types of coverage to be on the safe side.

If another car hits your car and you can prove it, then typically the other driver should pay for your repairs. However, that all depends on the state’s vehicle laws.

Over 70 percent of drivers have collision coverage. It costs an average of $63 per month, and the average deductible is $500.

Why It Pays To Have Collision Coverage

Collision car insurance is vital if you are new driver (and thus more prone to accidents) and/or if you have a new (or relatively new) expensive car. The average cost of a car accident in the U.S. is $820 per person. If you have collision coverage, then this is one less expense you have to worry about. And if your expensive car is totaled in an accident, you’d get no insurance assistance without collision coverage. When asking what does collision insurance cover, drivers should know that it can be vital. Although it could be financially tempting to drop collision coverage, keep in mind there would be less monthly savings for an older car. Collision insurance is also usually required in cases when the owner is financing the vehicle.

Why It Pays To Drop Collision Coverage

With the exception of New Hampshire, all other states require drivers to purchase limited liability car insurance to cover the cost of damages in an accident to other drivers and the other driver’s car. Collision coverage is optional, but many people opt in for it.

There are a few scenarios where it makes sense to drop collision coverage. If a driver is experienced and drives an old/low-cost vehicle, then dropping collision could be a good choice. After all, if the cost to repair the low-cost car exceeds the value, you might as well get another car.

How do you decide what does collision insurance cover and if you should drop it? Calculate the numbers and decide what works best for your budget.

The post Drop Or Keep Collision Insurance: What’s The Best Option? appeared first on moneyselfie.com.