Understanding Auto Collision Insurance?

December 25th, 2009 by Lloyd Pro Group Inc.

What is Collision coverage?

In our previous article we have discussed auto liability insurance which protects you from lawsuits that may occur because of accidents you may be involved in. But what about the repairs to your car’s damage?  That is where collision insurance comes in handy. For example, make believe you backed your car up and hit a tree or another car; collision coverage will help to pay for your vehicle repairs as well as having it repainted too.

Now while this form of auto insurance is not required by the state of Georgia, your bank may require it if you buy or lease a new car.

Should everybody get collision insurance? Well that depends on how much your automobile is worth. It usually doesn’t make business sense if the car is worth less than $2,000, since you would wind up paying more for the premiums than the car is actually worth!

What if the cost of the repairs is more than the vehicle is worth? Well then, the insurance company will claim that your car has been “totaled” and will pay out to you what they feel the car is worth, instead of paying for the repairs. Hopefully you will not be “upside down” in your loan so you will be able to pay it off in full. If not, you may want to seriously think about looking into getting gap insurance. “Gap insurance” helps to pay the difference between what your car is worth and what you owe on your loan.

Now you need to choose a deductible for your collision insurance.

If you decide to get collision coverage then you will need to choose a deductible.  A deductible is the amount of money that you are willing to pay out of pocket before you expect the insurance company to pay on a claim. For instance, let’s say you have a $250 deductible and your claim is for $750. The way it would work is that you would pay the first $250 and then the insurance company would cover the remaining $500.

Why would anyone choose a $500 or even a $1,000 deductible?

The lower the deductible you choose the more you will pay in monthly auto insurance premiums. The higher the deductible, the more affordable your insurance coverage will be. Does that make sense?

In conclusion, collision insurance can help to pay for your cars damage in case you are in an accident that you caused. Talk to your agent about  how much it would cost to add to your Georgia car insurance premiums.

If you would like to learn more about collision insurance then you can contact Lloyd Pro Group at (770) 381-5000

Nationwide Insurance and  Lloyd Pro Group an Georgia insurance agency, have been helping protect what matters most to their clients since 1985.  They can be reached at (770) 381-5000 or at their website http://www.lloydprogroup.com

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One response to “Understanding Auto Collision Insurance?”

  1. What Is Comprehensive Insurance? writes:

    [...] our last article in this series on understanding car insurance we discussed collision insurance which protects you if you have an accident. But what if something else happens to your car? Well [...]

    @ January 4th, 2010 at 16:44

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