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I have state minimum coverage and after hitting an icy spot on the road, hit a tree. Am I covered under my policy?

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If you are driving with a standard, minimum coverage auto insurance policy, running off the road and hitting a tree could introduce some problems for you. Standard policies typically cover damages caused to your car by someone else, but do not pay to repair damages that you cause yourself, whether it is a single car accident or a multi-car pileup that you are found to be at fault for.

To pay for damages to your car, whether in an accident with other cars or in a single car crash, you need a type of auto insurance known as collision coverage. Collision insurance is usually required by dealerships, so if you are still paying on a car loan you probably have it. Without collision insurance, the insurer will deny your claim.

Collision insurance is not part of a standard auto insurance policy, but the cost of coverage is very low because it is generally added to your existing policy. Collision insurance would pay for damages to your car while the standard liability coverage pays for damages and injuries that you may cause to someone else. This could be important if you hit a tree in someone's yard or property because the owner of the tree can file a claim against you for the value of the tree.

If the damage to your vehicle is minimal, it would be in your best financial interest to pay for the repairs out of pocket whether your insurance covers it or not. Since any claims you file will remain in your CLUE report for 7 years, filing a claim for a small amount could mean that your insurance rates, across all policies instead of just your car insurance, go up the next time the policies renew. A basic rule of thumb is that if you can afford to pay for the repairs yourself, it will work out best for you in the long run.

answered Feb 10, 2016 by anonymous
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