According to law, you should have collision car insurance. If a cop catches hold of you, there is very high possibility that he will ask you for it. If you wish to take a loan for your vehicle, the bank will first ensure that you do take collision car insurance. However for a loan, your credit rating also plays an important role.

As most of us own a vehicle, auto insurance is something we all deal with. We often come across advertisements of insurance – to be specific, auto insurance. The companies want us to check out their deal and promise to save our hundreds thousands of dollar with their deal. I feel really funny about the different tactics these insurance companies use to sell off their products; they can make unmovable things move, animals talk and non-living things living – all thanks to animation. Oh! But this is not the topic, what I am going to tell you about is collision insurance for your car.

This is the rule of all states that you at least have liability insurance for your vehicle. Have you ever come across the terms ‘comprehensive’ and ‘collision’ with respect to auto insurance? No! Don’t worry! You will get to know about it now.  These two are however not required by law, but if you took a loan for your car, then the bank will ensure that you have it, at least till the entire loan is paid off.

What is collision insurance and what is comprehensive insurance?

‘Collision insurance,’ as the name suggests, pays you in case you happen to hit your car with another. The collision of your car may be with another car or any object. The coverage pays you enough that you can fix your vehicle up, but after subtracting the deductible. Whoa! Another condition – ‘deductible’, how does this affect your claim amount? Let’s have a look:

* Deductible depends on the premium you pay.
* In general, higher the premium, lower the deductible.
* Many factors affect your decision about what the deductible should be – to start with, calculate the average cost of repair for your car.

Talking about ‘comprehensive coverage’, it is everything, but excluding collision coverage. It will pay you for damages to your car caused due to reasons other than collision. The reasons include theft, damage by animals, flood, earthquake (woo, these are sounding too big, ok, so I will stop here) and many more.

Another important point, you can buy collision insurance for your car without comprehensive insurance. But this is not possible the other way around. Then the question is – you have to have comprehensive insurance. But, is it necessary to have collision insurance for your car? Well, I guess you better know the answer as you know how you drive. Still, if talking about my views, if you are having a 1980 Ford, then probably you will pay more for the collision insurance for your car then the cost of the car. But if your car is a brand new Corvette, then I feel the insurance is worth it.