Collision coverage will typically pay for damage to your vehicle if it is involved in any of the following:
- Crashing into another car.
- Crashing into an object such as a tree or guardrail.
- Rolling over.
The repairs will be covered under the policy – minus a deductible. If your car is damaged in a hit-and-run incident, you will generally be covered through your collision coverage.
However, keep in mind that, collision insurance does not cover damage to another vehicle, if you should cause the accident. Your first concern might be if you have enough liability insurance to cover the other driver’s damage, especially if there are serious injuries. That’s why – if you can afford it – having a higher amount of liability coverage than the required Louisiana car insurance minimum is probably a good idea – just in case.
Key points about collision insurance:
- Collision is an optional coverage and to include it on your policy, you must also purchase comprehensive coverage.
- If you lease or finance your vehicle, your bank or lienholder will require you to purchase both collision and comprehensive coverage.
Choosing Your Deductibles
A deductible is the amount you are responsible for out of pocket, which goes towards a claim before your insurance company pays out. Collision and comprehensive insurance coverages require you to pay a set deductible whenever you make a claim that falls under either coverage. Your insurance company can help you decide on a deductible that best fits your situation.
You may choose a higher deductible to lower your premium. But, consider this – you will be paying more out of pocket towards a claim in the event you have an accident. So, while you’ll be saving money on your premium, you may want to set aside enough money to cover your higher deductible should you suffer extensive damage to your vehicle.
Rule of thumb – always choose a deductible with an out-of-pocket cost that will not cause a hardship for you if you are involved in an accident.
The value of your car is an important factor when determining whether you need collision and comprehensive coverage. If your car is:
- Older and/or low-value – it may not be worth the price of purchasing these coverages, since the insurance will only pay up to the estimated fair market value of your car.
- Newer and/or high-value – having these coverages can save you from paying out significant costs to repair or replace your car if stolen or totaled. Furthermore, the bank or lienholder will force you to purchase both coverages in order to fully protect their vehicle.
When comparing auto insurance quotes online, consider very carefully how much coverage you need and whether collision and comprehensive coverages are right for you.