by D. Lowell Brown

Created on: August 25, 2009   Last Updated: August 26, 2009

Very few people enjoy purchasing insurance. Often, they hurry through the process as quickly as possible. Their intent is to make this process as painless as possible for the smallest amount of money possible. However, very often in their rush to get through this process, they fail to learn what their policy actually covers. Knowing what the coverages are, and what protection they offer can make all the difference in the world when a claim has to be filed.

There are many different coverages in an auto insurance policy, and each coverage needs to be understood. This article is to serve as a help for understanding collision coverage.

The protection offered by the collision portion of an auto insurance policy is actually fairly narrow. Collision coverage covers damage to the insured vehicle caused by hitting or being hit by another car or other object, such as a guardrail or a parking barricade. It also covers damage sustained when a vehicle is rolled or over turned. The coverage will become available when any applicable deductible has been met, meaning that if a $500 deductible option is selected on an auto insurance policy, the policy holder is expected to pay the first $500 worth of damage. There are varying deductible options, be sure to choose one that is affordable.

Here are some examples of what collision coverage would cover; hitting another car, hitting a light post, running into a guardrail, hitting anything that is lying in the middle of the road or highway or rolling the car.

Here are some examples of situations that WOULD NOT be covered by collision coverage; hitting an animal (this is covered under comprehensive coverage), damage caused to another persons property as the result of an accident (this is covered by your liability coverage), vandalism (this too is covered by comprehensive coverage), damage purposely incurred by the vehicle owner (there is no coverage for this, and fabricating facts to get the damage covered constitutes fraud).

There are of course other circumstances that may or may not be covered by collision coverage, each claim is handled individually.

Some instances that may occur where collision coverage may extend but are not common are; a borrowed car being driven by a party who has collision coverage on their own auto insurance policy, a car in the care, custody or control of a person who has collision coverage on their own auto insurance policy.

Why should you have collision coverage? The most common reason is that a car is financed through a bank, and the bank requires the coverage to protect the loan they made. If a car is ten years old or newer, has 100,000 miles or less, and is still worth more than a couple thousand dollars, it is a good idea to protect it with collision coverage. To determine if you need collision coverage, ask yourself, "If I totaled my car in an accident covered by collision coverage, can I afford to replace the car myself?" If you can not afford to replace it out of your pocket, you should carry collision coverage on your auto insurance policy.

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