Are There Deductible Amounts on Collision Coverage Policies?

Posted in Auto Insurance

May 7th, 2009

Automobile collision coverage will cover the repair of damages to your car that result from an accident with another vehicle, regardless of who is at fault. If you own a car that has a market value over $5,000, or if you can’t replace your car easily, then you should consider buying it. Collision insurance benefits could help you out a great deal in an accident. Automobile collision insurance, like most other kinds of car insurance, or any insurance for that matter, will offer you a choice of deductible amounts. The cheaper your monthly premium payment, the higher your deductible will be when you get into an accident. Conversely, the higher your monthly premium payment, the lower your deductible. The choice is yours.

Let’s say you drive a 3-year-old Toyota Prius. You took out a bank loan to buy it, and you’re still paying it off. One day you’re driving down the street and are involved in a traffic accident. You are found to be at fault for the accident. Your liability coverage will pay for the other car’s damage, and your collision coverage will pay for yours. If you decided to save money on auto insurance in the short run and pay a lower monthly premium in exchange for a higher deductible, then you are going to be looking at considerable out-of-pocket repair charges, depending on your deductible amount. If you decided to play it safe and pay a higher monthly premium in exchange for the promise of a lower deductible, then you could walk away from this accident with very little to pay out of your own pocket.

To learn more about car collision coverage and deductibles, be sure to consult with an auto insurance expert.

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