There are three essential auto insurance coverage which most of the time vehicle owners consider to purchase. These are liability, comprehensive and collision coverage. But this time, this article will focus on collision automobile insurance.

In the event of accident when you are the at fault driver, this type of coverage may cover the repair cost of your vehicle. However, if the other party is the one who caused the accident, his or her insurance company will pays for your vehicle repair in full. Full coverage also means that the other at fault insurance company pays for the repair cost and sometimes lend a temporary replacement car while your vehicle in being repaired. On the other hand, when you are the at fault party, your insurance company will cover the repair cost less the amount of your deductible. Deductible is the amount you agreed to take off to lower your monthly premium and must be paid out of your pocket for the repair cost when an accident occur.

For example, you get involved in an accident and the cost of the repair which you have to pay is 3,000 dollars. Your insurance provider will send an auto insurance adjuster to estimate the cost of the repair. When the estimate is done, your insurance company will pay 3,000 dollars less the deductible amount, let say you have 500 dollars deductibles. They will pay you 2,500 dollars to cover your vehicle repair which you have to pay first the deductible amount before they will pay you the remaining balance.

This type of coverage is considerably beneficial in loan or leased vehicle which protects the value of your car and assist you financially when certain accident occur.

In general, collision auto insurance pays for the repair cost of your vehicle when you are the at fault party in an accident minus your deductible. When the time your car is paid off, decide whether you still need collision coverage which certainly depends on your vehicle condition.