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Collision Insurance is a category of insurance found on automobile policies. Collision insurance pays for damages to your car when you are at fault. The car is usually covered for damages up to the fair market value of the car.
In the event that a collision repair is necessary, the policyholder is responsible for any deductible identified on the insurance policy. For example, if the collision deductible is $500, then the policyholder will pay the first $500 of any repair amount.
Drivers are not required to carry collision insurance on a car, however, if a loan or lease exists on the car, it is very likely that collision insurance will be required until the loan has been satisfied or the lease is terminated.
Damages to the car that are caused by "act of God" or an unidentified party are covered by comprehensive insurance. |
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