- Find out what collision coverage is, what it covers and what it doesn’t cover.
- Learn how collision coverage works with deductibles, actual cash value and total-loss settlements.
- Discover simple ways to compare collision coverage and “other than collision” coverage (often called comprehensive) so you can understand when each one applies.
- Determine whether collision coverage makes sense for a financed, newer or older vehicle.
What Is Collision Insurance?
Key Takeaways
Collision is a coverage within an auto policy that helps pay for damage to your own vehicle after a covered crash, regardless of who caused the accident. For example, if you hit another car, back into a pole or slide into a guardrail, the repair bill can add up quickly – and collision coverage is designed to help with that.
While collision coverage usually isn’t required by state law, it may be required if your car is financed or leased. Understanding what collision insurance may or may not cover and how it works can help you choose coverage that fits your vehicle and budget.
What does collision insurance cover?
Collision insurance is designed to cover damage to your own vehicle from collision-related incidents, and it generally applies no matter who is at fault.
Here are some common examples of what it covers:
- Single-car collision: If your car hits an object like a tree, guardrail, fence or pole, collision coverage will typically help cover the damage to your vehicle – even if no other car was involved.
- Collisions with another vehicle: If you're in a crash with another vehicle, collision insurance can help pay to repair your car or, if it’s totaled, pay your car’s value minus your deductible.
- Hit-and-run accidents: If another driver hits your car and leaves the scene, collision coverage may help cover the repair costs to your vehicle, even if that driver is never identified.
- Rollovers: If your vehicle rolls over in an accident, collision coverage may help pay for the resulting damage.
- Pothole or road damage: In some cases, damage caused by hitting a pothole or another road hazard may fall under collision coverage.
What collision covers vs. what it doesn’t
| Situation | Usually covered by collision? |
|---|---|
| You damage your car by hitting another vehicle | Yes |
| You damage your car by hitting a pole or guardrail | Yes |
| Your car is damaged in a hit-and-run | Yes |
| Your car is stolen | No — this would usually fall under comprehensive coverage. |
| A rock from the roadway kicks up and damages your windshield | No — this would usually fall under comprehensive coverage. |
| You damage someone else’s vehicle or fence | No — this would usually fall under liability coverage. |
| You or your passengers are injured | No — this would usually fall under Personal Injury Protection or Medical Payments, depending on your policy and state. |
| You cause bodily injury or death to another driver, passenger or pedestrian | No — this would fall under bodily injury liability coverage. |
| You damage your car when you hit a deer in the roadway | No — this would usually fall under comprehensive coverage. |
What isn’t covered by collision coverage?
Although collision insurance can be valuable, it doesn’t cover every type of loss. Here’s what collision coverage typically does not cover:
- Non-collision-related damage: For losses caused by theft, vandalism, falling objects, flood, hail, fire or an animal, you’d typically need comprehensive coverage.
- Damage to other vehicles or property: If you cause an accident that damages another person’s car, mailbox, fence or other property, liability coverage would typically apply instead.
- Injuries to anyone involved in the accident in your vehicle: Collision insurance doesn't pay for injuries — whether to you, your passengers or others (including drivers, passengers or pedestrians). Injury-related expenses for you and your passengers may be covered by personal injury protection (PIP) or medical payments coverage, while injuries you cause to others would typically fall under bodily injury liability coverage.
- Routine maintenance or mechanical breakdowns: Collision coverage doesn’t pay for wear and tear, engine trouble or routine repairs.
Do I need collision coverage?
Whether you need collision coverage depends on your car, your finances and how much risk you’re comfortable taking on yourself.
Required for financed or leased vehicles
If you’ve financed or leased your vehicle, your lender or leasing company will often require both collision and comprehensive coverage. This helps protect their financial interest in the vehicle.
Recommended for newer or higher-value vehicles
If your car is newer or still worth a significant amount, collision insurance may make sense. Repairing or replacing a newer vehicle after an accident can be expensive, and this coverage can help reduce out-of-pocket costs.
Optional for older vehicles
For an older car with a lower market value, collision coverage may be less worthwhile. If the yearly premium and deductible approach what the car is worth, you may decide to opt out of this coverage. A good way to think about it is to compare the cost of keeping collision coverage with what you could afford to pay yourself if the car were damaged or totaled.
How does collision coverage work?
The answer to this question usually comes down to three things: your deductible, your vehicle’s value and the claim process.
- Choose a deductible: When you add collision coverage, you choose a deductible. This is the amount you pay out of pocket before your insurance company pays for covered damage.
A higher deductible often lowers your premium, but it also means you’ll pay more if you file a claim. A lower deductible usually means a higher premium, but less out of pocket after a covered accident. If you want to learn more, see “How Do Car Insurance Deductibles Work?”
- Coverage limit based on actual cash value: The amount your insurance company may pay is generally based on your vehicle’s actual cash value (ACV) at the time of the loss, unless you carry enhanced protection. ACV reflects depreciation, so it takes your car’s age, mileage and condition into account. If your vehicle is totaled, the insurer would generally pay the ACV, minus your deductible.
For example, if you hit a guardrail and your car has $5,000 in damage, and you have a $1,000 deductible, your insurance company may pay $4,000 toward covered repairs.
How do comprehensive and collision coverage differ?
Comprehensive and collision insurance are both optional vehicle coverages within an auto policy that help protect your own car, but they apply in different situations.
| Coverage | What it usually covers | Example |
|---|---|---|
| Collision | Damage from hitting another vehicle or object | You back into a pole or collide with another car |
| Comprehensive | Damage from events other than a collision | Your car is stolen or damaged by hail |
For a deeper comparison, read “Comprehensive vs. Collision Insurance”.
Get the right auto insurance coverage for your needs
Collision coverage is one part of a well-rounded auto insurance policy. To build the protection that fits your needs, it helps to understand how it works alongside other coverages.
- Liability Coverage: Typically covers property damage or injury-related expenses to others if you're found at fault for an accident.
- Comprehensive Coverage: Also referred to as “other than collision” coverage, it helps cover damage to your vehicle from incidents like theft, vandalism, fire, weather or contact with animals.
- Personal Injury Protection: Covers medical expenses and lost wages up to a certain limit, regardless of fault in an auto accident.
- Medical Payments Coverage: Pays for your medical expenses or those of your passengers following a covered auto accident.
- Uninsured/Underinsured Motorist Coverage: Provides protection if you’re involved in an accident with a driver who doesn’t have enough or any insurance.
When you combine collision with other available coverages, you can create an auto insurance policy that offers broader protection on and off the road.
See how your coverage fits your needs: You can explore “Car Insurance Coverage Options” or get started with “Car Insurance Policies”.
Get an auto insurance quote today
FAQs about collision insurance
Collision insurance usually isn’t required by state law, but your lender or leasing company may require it if your car is financed or leased.
No. Collision is an optional coverage within an auto policy.
If your car is damaged in a hit-and-run, collision coverage can often help pay for repairs to your vehicle, subject to your deductible and policy terms.
No. Collision insurance doesn’t cover routine maintenance, mechanical breakdowns, or wear and tear.
It depends on your car’s value, your deductible, your premium and whether you could afford to repair or replace the vehicle yourself after an accident. You should consider what you'd be willing to pay out of pocket to repair or replace your vehicle should an accident occur.
Your Policy, Policy Declarations or Amended Declarations in effect on the date of loss is the primary source of reference for your coverage, coverage limits and deductible amounts.
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