what is collision deductible

A collision deductible is the amount of money a policyholder has to pay out of pocket before their insurance company pays for the remaining cost of a covered claim. Collision coverage is a type of physical damage insurance for motor vehicles that pays to repair or replace a policyholders car, truck, van, or motorcycle after it collides with another vehicle, a pedestrian, or any other property. The deductible amount is set by the policyholder when they apply for collision coverage, and it can be adjusted to either pay more out of pocket in case of an accident or pay more every month to have the full amount taken care of. The higher the deductible, the lower the cost of the insurance will be. It is not mandatory to have collision insurance in any of the US states, but if a vehicle is financed, lenders will usually require that the purchaser or lessee carry collision coverage during the term of the loan or lease.