Collision
Collision coverage in auto insurance is a type of coverage that helps pay for the repair or replacement of your car if it's damaged in a collision with another vehicle or object, regardless of who is at fault.
Example #1
If you have collision coverage and you get into an accident where you hit another car, your insurance company would help cover the cost of repairing your vehicle.
Example #2
Collision coverage also applies if you hit a stationary object like a tree or a pole, your insurance would assist in covering the damages.
Misuse
An example of misuse of collision coverage would be falsely claiming that your vehicle was involved in a collision to get insurance to pay for pre-existing damage. This misuse is harmful because it drives up insurance costs for everyone and undermines the integrity of the insurance system.
Benefits
Having collision coverage provides peace of mind by ensuring that your vehicle repairs or replacement costs are covered in case of an accident. For example, if you collide with another car and your vehicle sustains significant damage, having collision coverage can save you from bearing the full financial burden of repair or replacement.
Conclusion
Collision coverage is a valuable component of auto insurance that protects policyholders from the financial impact of collision-related damages. It is important to understand the coverage limits, deductibles, and exclusions of collision coverage to make informed decisions when selecting auto insurance policies.
Related Terms
See Also
Falling Objects CoverageComprehensiveTransportation Expense Coverage