Should You Add Collision Coverage To Your Auto Insurance Policy?

When you purchase auto insurance, you get to customize your plan to suit your needs and risks. One option you will have is adding collision coverage to your plan, and you might not know if you should or not. Collision coverage is vital in some situations, but it is not necessary for others. Here is an explanation of what it is and tips to help you determine if you should add it or not.

What It Is

Auto insurance offers many options, and collision coverage is one of these. Collision coverage is unique and helpful, but it costs extra to add it to a policy. With collision coverage, you can have protection for your car for almost any situation that might lead to damages. The main thing it covers is damages that you cause when you do something that leads to an accident. If you cause a collision and have car damages from it, the only coverage you can have that will protect you is collision coverage. If you cause an accident and do not have this type of coverage, you will have to pay for the repairs out of your pocket.

How to Tell If You Need It

Now that you know what collision coverage is, you might wonder if you should add it to your policy. The first way to determine this answer is by looking at your loan. Do you have a car loan on the vehicle? If so, you must purchase collision coverage, as auto loan lenders require it. If you do not have a loan, you can choose whether you want it or not.

The next thing to look at is your car's value. If your car is not worth a lot, it might not make sense to pay for this coverage. Collision coverage can cost a lot of money, so it might not make financial sense to add it to your plan if your car is not worth a lot. If your car is worth a lot, you should always have it, even if you do not have a loan. Your collision coverage protects the investment you have in your car by offering you coverage if you damage your car from causing an accident.

If you believe that you need collision coverage, you can add it to your policy. If you are still unsure about it, contact an auto insurance agent. An agent can help you decide if you should purchase collision coverage or not.