Tuesday, May 12, 2015

Collision Coverage

Three Ways Collision Coverage Serves You

  • Pays for damage to your vehicle when YOU cause an accident:
    • If you wreck your own vehicle, your insurer will pay for the cost to repair the vehicle, or if the cost to repair is more than the value of the vehicle, they will pay to replace it based on its market value at the time of the accident.
    • Pays for damage to your vehicle when ANOTHER DRIVER causes an accident:
      • Your insurer will pay your damages and then go seek reimbursement from the other driver’s insurance.
      • Many drivers take advantage of this option when the at-fault driver’s insurer is being difficult or slow to act. You will typically have to demand your insurer take action in this scenario, but if you paid for collision coverage, you have these benefits.
      • Using this option should not raise your rates, since you were not at fault. Be sure to ask your insurance adjuster whether a scenario will or won’t affect your rates before choosing your course of action.
    • Pays for damage to your vehicle in circumstances not covered by other sections of your policy:
      • If you do not purchase comprehensive coverage for vandalism, acts of nature, theft, etc., then you can typically claim such losses under collision coverage.
      • For hit-and-run accidents or damage caused by a driver with no insurance, you can typically claim such losses under collision coverage.
      • Using collision coverage in these scenarios may raise your rates, as your insurer may assess such damage as if you were at fault or caused it yourself. This is why it’s best to carry comprehensive (COMP) and underinsured motorist (UIM) to pay for damage in any scenario.

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