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FAQ: Demystifying Auto Insurance Definitions
What is collision coverage?
When you think about auto insurance coverage, most likely collision coverage is what comes to mind. Unlike liability insurance, collision coverage is designed to help pay for damage to your own automobile. In your auto insurance policy, collision coverage helps pay for auto repair or replacement costs if your car rolls over or if your car hits another vehicle or object.
Collision coverage is not mandatory in every state; however, if you were ever in an accident the out-of-pocket expenses would far exceed what you pay for collision coverage.
When you buy collision coverage, you'll be asked to choose a deductible. If you choose a deductible of $1000, you'll be required to pay up to $1000 out of your own pocket if your car needs to be repaired or replaced. However, choosing a higher deductible helps decrease your auto insurance premium.
In setting your deductible, think about which you'd prefer—a low insurance premium accompanied by a higher out-of-pocket amount in the event of an accident, or a higher premium to ensure lower out-of-pocket expenses toward an accident. On the Esurance site, it's easy to explore the effect of changing your deductible by getting a quote, then using our "customize coverage" features.
Esurance also offers an interactive Coverage Counselor that can help you determine the right auto insurance coverage levels for you. Everyone’s situation is different, and it’s important to choose a deductible you’re comfortable with. We hope the day never comes when you have to pay this deductible, but in case it does, it’s good to know you’re covered!
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