Collision insurance coverage is an optional type of car insurance and protects against collision damages to the car from another vehicle, object or person. Many people who finance or lease a new vehicle consider getting collision insurance to protect themselves from excessive expenses in the event of an accident. Here are ten reasons you only need to purchase collision insurance coverage:
1. You’re buying a brand new car. If you are getting a car loan to purchase a new car, or paying for a brand new car with cash, you can protect yourself against the high cost of repairing the vehicle in the event of a collision or other damages when you hold collision insurance coverage.
2. You’re financing a car from the dealership. All dealerships require you to have at least collision insurance and some require comprehensive car insurance. Having collision insurance on a financed vehicle makes it less risky in the eyes of the dealership.
3. Your car has a high resale value. Even though collision coverage may have high premiums, it will cover many expenses associated with the accident and can protect you from financial ruin when your car has a high resale value.
4. You’re covered even when the accident is your own fault. Unlike other types of car insurance plans, collision coverage will pay for damages associated with the accident even when you are at fault.
5. You will have protection when the other driver has no liability insurance. When another driver is responsible for an accident and they do not have liability insurance, you will be reimbursed for damages through your own collision insurance coverage.
6. You took out a car loan to purchase your car. Collision coverage will protect you from financial ruin when your car hasn’t been paid off in full and is damaged in an accident.
7. You need to designate the amount of coverage you want. Most auto insurance providers offer collision insurance for up to $100,000, but you can choose more or less depending on what you need.
8. Your car would be very expensive to replace. If you have purchased a custom car, exotic car or other high-priced vehicle that would be very expensive to replace, you will benefit from collision coverage because you won’t be responsible for paying for all of the repairs yourself.
9. The fair market value of your car is still high. You can consult the Kelley Blue Book to find out what the market value of your car is. If it is still close to what you paid for the vehicle, it may be beneficial to have collision insurance coverage.
10. You plan on selling a new vehicle in the near future. If you are planning to sell a new vehicle in the near future and don’t want to pay for comprehensive car insurance, collision coverage will cover the costs of damages in the event of an accident. This can give you a sense of security before you sell your vehicle.