Collision insurance is car insurance that covers automobile repairs or replacements in the event of an accident. If a car hits or is hit by another automobile or object, collision insurance will assume all costs after the insured party meets her deductible.

To keep your car insurance premium low, you can choose to increase the deductible of your collision insurance. A higher deductible means a lower monthly car insurance payment; however, you will have a higher out-of-pocket rate in the event of an accident. A lower deductible for collision insurance means you will pay less up front in the event of an accident but potentially more money over time.

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