Collision auto insurance covers just what you would think.
If your car collides with another car or object, the policy
will pay for repairs or damage to your car. It may also cover
the cost of towing and storage. Generally the policy will
pay the policyholder no matter who is at fault. In case of
an accident the policyholder must usually first pay a deductible,
after which the insurance company must pay the rest up to
the limits of the policy.
The maximum amount an insurance company will pay is usually
limited to the cash value of the automobile. This insurance
is sometimes referred to as 'accident auto insurance'. Collision
insurance is often bundled with comprehensive
insurance although these can be purchased separately.
Other Important Points About Collision Auto Insurance:
Drivers can reduce the cost of collision insurance by raising
their deductible.
A bank or loan company that financed the purchase of the
car, may require collision insurance.
It is probably not worth insuring an older vehicle, since
the replacement value of the car will be small. Your vehicle
should be worth ten times the cost of the annual premium to
justify the expense.
Other Auto Insurance Terms & Definitions
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