Collision Coverage
What is collision coverage?
Collision Coverage pays for damages that are inflicted on your car during an accident, regardless of who is at fault.
How does collision coverage work?
The following facts will help you understand how Collision Coverage works:
- Collision Coverage will pay to repair your car, or replace it, depending on the amount of damage inflicted on your car.
- Both the Actual Cash Value of your car and your deductible play a role in deciding how much your insurance policy will pay if your car is damaged.
- Actual Cash Value is the market value of your car before it was damaged by the collision.
- The amount your insurance company will pay for damages to your car is determined by the following formula:
Actual Cash Value of Car- Policyholder’s Deductible= Amount Paid
What does it cover?
Collision Coverage only covers damages that are made to your car.
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What is not covered?
Collision Coverage does not cover damages that are made to other cars in an accident, nor does it cover any injuries or medical expenses.
How much do I need?
The amount of collision coverage you need depends on a variety of factors, one of which is the age/condition of your car. See the following examples for more information:
- June has an old car. The market value of the car has decreased over the years, as has the condition of the car. June buys less collision insurance.
- Jeff has a newer car. Since the market value of his car and the condition of his car have not yet deteriorated much, he purchases more Collision Insurance to insure the safety of his car.
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