Auto insurance is an important product to purchase if you own a car or drive, but it can also be confusing when it comes to choosing which types of coverages you should have. One of the options you can choose to carry is called collision coverage, and while this is the most expensive type of coverage you can have, it is also the most comprehensive. If you are not sure if you should have this or not, here are several questions to analyze that may help you decide.

Is your car valuable?

Collision auto coverage protects your car from any type of damage or situation in which you cause. If you hit another car, for example, the accident would be your fault, and your collision coverage would compensate you. If you have a car that is valuable and has a lot of equity in it, you should always carry collision coverage on it. Without it, you could lose a lot of money if you wreck your car.

Do you have a loan on it?

The second thing to know is that you might not have a choice whether you have collision coverage or not, because if you have a loan on the car, you are required to carry this type of coverage. Your lender will make this a requirement for their protection, and they will even purchase collision coverage for you if you fail to buy it yourself, and they will then charge you for the coverage.

Would you suffer financially if you lost your car?

It is also important to realize that if your car is valuable and you wreck it, you would lose out on the car and its value. If this is something that would cause you severe financial trouble, you should never drive your car unless you have collision coverage, as this is the only protection you have in this situation.

Do you want to be protected from hit and run accidents?

One last thing to know is that collision coverage does not just protect you from the accidents you cause, but it also protects you in other ways. A good example of the extra type of protection it offers is for hit-and-run accidents. If this is a situation you are ever involved in, you could use your collision coverage for compensation instead of having to pay for your car repairs out of your own pocket.

These are some of the best questions to evaluate as you decide whether to have collision coverage or not. If you decide you would like to have this coverage, talk to an insurance agency like Nelson Insurance Agency today.