Who Needs Collision Coverage?
Collision insurance is for everyone who wants to protect themselves from losing their car in an accident. Your vehicle could be destroyed completely in a collision accident with other vehicles for instance, or it could be severely damaged if it rolls over due to a tire hazard in the road. Collision insurance coverage can pay damages or it can pay you for the entire cost of your vehicle if it is totaled and unusable.
Collision insurance coverage is normally packaged with either comprehensive coverage or Fire and Theft coverage.
When you combine collision protection with comprehensive coverage, you protect yourself from both collision event losses and theft or vandalism losses. Fire and theft CAC coverage is similar to comprehensive but it’s more limited. It’s also designed primarily for use with certain types of heavy duty trucks.
If your business leases vehicles or you are still paying off your auto loans, your lender or lease agreement likely requires you to carry collision insurance coverage.
Collision Insurance Deductibles And Other Details
When you set up your collision insurance coverage, you must specify a policy deductible. The deductible is how much money you must personally pay for collision damages before the insurance policy makes payments. If you have a $1,000 deductible on your collision coverage for example, your insurance policy would pay for any damages over the initial $1,000. You would be responsible for paying that initial deductible amount.
When selecting your collision insurance deductible, keep in mind that high deductibles lower your insurance policy costs. Select a deductible that is reasonable for you to pay from your personal or company funds.
When you add collision coverage to your business auto insurance policy, you will be required to fill out a “Stated Amount” form or line. This amount should be your best estimate as to how much your vehicle is currently worth. When considering the value of your car, remember to consider its age, mechanical and physical condition, and any upgrades or permanent equipment you have installed.