If you are financing your vehicle, carrying collision coverage is not an option. Your lienholder will require that you show proof of collision coverage on the vehicle. If you don't show proof, your lienholder can force place collision coverage and you will have to pay whatever rate they give you. So, it is definitely worth your time to shop for the best and most affordable coverage.
There are a few nuances about collision coverage and your policy that you may not know about, of which are rarely discussed with you when you purchase auto insurance. One of the most common issues and misunderstandings with collision coverage is:
Replacement Part usage to repair your vehicle after an accident
When it comes to repairing your car, there is a common misperception in which people often assume that their insurance company MUST use only brand new, OEM or Original Equipment Manufacturer parts to repair the vehicle. As an example: if your front bumper warrants replacement and you drive a Toyota, you would likely assume a brand new Toyota bumper would be used. This is usually not the case.
Your insurance company does have a contractual duty, by way of your policy, to return your vehicle to pre-accident condition in the event of a covered accident. However, most insurance policies have language in them that allow the insurance company to use alternative parts if they are more cost effective for the insurance company. This would include LKQ (Like Kind & Quality) or used parts, Remanufactured or Refurbished parts or Aftermarket parts. An example of an aftermarket part would be a new bumper for your car but not manufactured by Toyota but by a different company.
From my experience as a claims adjuster and a claims manager, this often becomes an issue for the insured as many people say they don't want used parts or non-Toyota parts on their vehicle. Something to consider is this:
If you drive a 2007 Toyota Camry and it needs a new front bumper due to an accident, would putting a brand new bumper on the vehicle be returning it to its pre-accident condition? Not really. In this case, using a brand new bumper would actually be improving your vehicle as it would then have a brand new bumper on a 4 year-old car.
Now, having said that, your insurance company does have to be aware of fit and finish. What that means is if they choose to use an aftermarket bumper, they do have to make sure that it fits as a OEM bumper would and does not alter the pre-accident appearance of your vehicle, or finish. If the alternative part does not meet fit and finish compliance they will likely go ahead and use an OEM bumper.
It is important to note a few more things in terms of your policy and your collision coverage:
Many policies will have specific guidelines in them that dictate when it is appropriate to use alternative parts. As an example, your policy may state that if, at the time of the accident, your vehicle is less than a year old or has less than 12,000 miles on it then your insurance company can only use OEM parts.
There are insurance companies that will only use OEM parts for repairs, regardless of the age of your vehicle. If a part is not available from the manufacturer then they will look to use an LKQ or used part. Keep in mind this is a good alternative as it will be an OEM part off a car just like yours, so fit and finish won't be an issue. And, if the part needs painted or repaired so that it looks good, that will be included in the cost of repairs.
We recommend that you have a look at your current policy so that you can understand how your insurance company will handle damages to your vehicle under a collision claim. In addition, if you are shopping for a new auto insurance policy, we suggest asking the agent or carrier what their policy states as it relates to collision coverage and the use of alternative parts. By doing this, you ensure you understand your policy from the beginning and there won't be any issues should you have to file a collision claim.
Article Source: http://EzineArticles.com/6796103
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