Pepperdine Graziadio Business School Law Professor Gia Honnen-Weisdorn Provides Insight on Collision Insurance in WalletHub Article
Collision insurance is coverage that helps pay to repair or replace your car if it is damaged in an accident involving a collision with another car, tree, fence, or other objects. Collision insurance is not required by any state law, but if your car is under lease or loan, your lender may require it. Even though collision insurance is optional, drivers should still consider purchasing collision car insurance in order to protect their finances in the event of an accident.
Professor Gia Honnen-Weisdorn answered questions on what people should consider when it comes to selecting collision insurance:
What drivers should purchase Collision Insurance?
Among other reasons, anyone required to do so by the terms of a lease, rental, or another similar contract; anyone with a car that is expensive to repair; and anyone whose repairs may exceed their policy deductible.
How should drivers pick their Collision Insurance coverage levels?
This is an individualized economic calculation based on several factors such as: any levels required by the contract; the type of car one drives; how much one drives; and the like.
How should drivers pick their Collision Insurance deductible?
Another individualized economic calculation based on balancing the premium cost against the benefits of the policy coverage.
When should drivers drop Collision Insurance?
It depends if drivers can easily afford the policy premium. If so, then it may make sense to keep it in place. If a driver no longer has a contractual obligation to hold this policy and cannot easily afford the premium, then that may be one instance in which to consider dropping it.
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