Just like the name suggests, collision coverage insurance pays for your vehicles damages when it crashes into another car or object. The decision to have or drop collision coverage is yours since it's not a state requirement. However, there are several good reasons for buying the coverage. Here are four situations in which it's best to have collision coverage:

You Have a New Car

You need collision coverage if your vehicle is new because newer vehicles cost more to repair than older ones. Some old vehicles have lost value so much that their cost of repairs, for example after a collision, may even outweigh their values at the time of their accidents. As your vehicle ages, it's best to weigh the value of your vehicle against the cost of collision coverage; after that decide if the latter is worth buying. Stop buying collision coverage when your car depreciates to the point where collision coverage doesn't make sense.

You Are Still Paying For Your Car

If you haven't repaid your car loan, you need to collision coverage to protect its value. In fact, collision coverage is likely to be a requirement from your lender as a means of protecting his or her investment. In fact, the lender may purchase collision coverage and add it to your outstanding loan if you don't buy it yourself. The coverage ensures that you don't get into a situation where your car is worth less than what you owe on it, which can easily happen if you are involved in a serious crash and you lack appropriate insurance.

You Own an Expensive Model

Some car models are just more expensive than others to repair and maintain. It may be because they are exotic models, limited edition models, or high-performance cars. If your car's spare parts are expensive and difficult to source, for example if you have to import them, then it's going to be expensive to repair. Whatever is making your car expensive to repair, collision coverage will save you lots of money on repairs.

Your Risk of Collision Is High

Do you think your risk of getting involved in an accident is high? If your answer is in the affirmative, then you should carry collision coverage. Your risk of collision is high if you use your car frequently, love going on long road trips, and have been involved in several accidents in the recent past. Analyze your driving and buy collision coverage if your risk of crashing is high.

For more information, contact companies like Nelson Insurance Agency.