Collision insurance covers the necessary repairs to your car if you’re in a crash and comes in handy if the other driver is uninsured or underinsured. Some collision policies include the fee for a rental car, as some repairs can take several days and leave you without transportation. It will also pay to replace or repair your car if the crash is your fault. It’s not standard on most auto insurance, so keep your eyes open for special insurance!

If you lease a car or make payments on a car you are buying, you’ll be required to have collision insurance with the limits dictated by the leasing company or financial institution you’re dealing with. But what if you have finished making the payments for your car and you now own it?

The value of collision insurance depends on the value of your car. If you have a car that’s ten years old (make sure you look into vintage car insurance!), its value is probably so low that you couldn’t buy another car for the amount your insurance would compensate you. A car that old will probably be “totaled” by your insurance company, meaning it cannot be repaired. You will then be paid the market value of the car. Older vehicles are often not worth the cost of collision insurance. You will have to figure in your deductible, too, or the amount you have to pay before your insurance takes effect.

If you own a newer model car that would be quite expensive to repair or replace, collision insurance might be a good choice and well worth the cost of the premiums. A good agent can advise you whether your car warrants buying collision insurance, together with your usual car insurance or not!