How To Understand Collision Coverage

Accidents happen to even the most careful driver - which is why collision coverage is one of the best ways to protect yourself against unforeseeable events. Collision coverage is not enforced on all drivers, but it is one of your best insurance defenses when you find yourself in an accident.

Collision coverage is insurance intended for repair or replacement of the insured party's car in an accident regardless who or what caused the collision. Collision coverage premiums require the payment of a deductible when a claim is made, usually $250 or $500. The collision coverage will pay for the repair or the replacement of the policy holder's car including the personal property within if it was damaged or destroyed by fire, flood, and other accidents or calamities. There are two types of collision coverage insurance:

1. Replacement Cost Value. In insurance terms, the collision coverage might be an RCV (replacement cost value) or ACV (actual cash value). The replacement cost value pays for cost to loan or purchase a new car to replace the old one. Replacement Cost Coverage protects you from losing money due to depreciation by replacing your old car with a brand new one (or the cash equivalent). The depreciation must be caused by fire, flood, vandalism or thievery.

2. Actual Cash Value. This merely pays for the cost for the repairs to bring the car back to its condition before the accident. Determining the value for an ACV recipient is easier to determine because you can find several sources that will provide actual cash value (ACV) estimates online or through publications. Some common sources for ACV estimates are N.A.D.A. Guides, Kelley Blue Book and Black Book. These will give you a good idea on how much your vehicle is worth.

RCV has a greater maximum benefit than ACV but it entails a higher premium. All collision coverage insurance policies slightly differ in premiums. Here are some links with tips you might consider if you want to apply for collision coverage or if you want to change the type of coverage plan you are currently enrolled in.


* Personal Insure. Get cheap insurance for your car. The list helps you how to get affordable car insurance. These insurance plans are affordable, but able to provide you with excellent services. You may use this list in acquiring new policy or getting a new insurance quote.

* Car Insurance Company. Get insurance free insurance quotes in minutes. With the Car Insurance Company, you can get quotes from several insurance companies and compare them easily with other service providers. This will help you in deciding which plan to subscribe to. The Car Insurance Company's Online Insurance Marketplace gives you the opportunity to check and compare insurance policies on the Web or through their sales center.

* Car Buying Tips Online. This site allows you to review car insurance sites and watch out for insurance sales scams. They have links to commonly used car insurance terms to let you easily understand the fine print in whatever collision coverage plan you are planning to take. This user-friendly website has a thorough guide on online auto insurance sites. You can also compare rates and avail free quotes.

Now that you know what collision coverage means, you can easily search for a plan that will suit your budget, driving style, and other needs.
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