What is collision insurance?
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“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.
BLUEPRINT
Updated 9:06 a.m. UTC Feb. 7, 2024
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Key points
- Collision insurance can help pay for repairs to your vehicle if it collides with an object, such as another vehicle or pole.
- If you have a loan or lease on your car, your lender likely requires collision coverage.
- Collision and comprehensive car insurance offer coverage for different types of scenarios and are not interchangeable.
Collision insurance explained
Collision insurance is an optional car insurance coverage that pays to repair or replace your vehicle if it’s damaged in a crash with another car or object, regardless of who is at fault. It does not cover damage to another person’s vehicle after an accident you cause — you’ll need liability insurance for that.
Collision insurance has a deductible, which is the amount your insurer will deduct from your claim check. If your collision insurance deductible is $500 and repairs to your car will cost $2,000, your insurer will pay $1,500.
As an optional coverage, collision insurance will increase the cost of your car insurance by an average of $814 per year. According to Mark Friedlander, spokesperson for the Insurance Information Institute (Triple-I), about 80% of drivers in the United States carry collision insurance.
What does collision insurance cover?
Collision insurance covers repairs or total replacement of your vehicle if:
- You collide with another vehicle.
- You crash into an object, like a tree or a fence.
- You hit a pothole while driving.
- You’re the single driver in a crash like a rollover.
- You are the victim of a hit-and-run.
What is not covered by collision insurance?
Collision insurance does not cover damage to:
- Another driver’s vehicle.
- Medical payments for any individual injured in a collision.
- Vehicle damage from a storm or natural disaster.
- Car theft or vandalism.
- Damage from falling objects, such as a broken tree limb.
- Contact with an animal, such as hitting a deer.
If you want coverage for car theft and damage caused by falling objects, animal collisions, flood, fire and hail, you need comprehensive car insurance. This coverage is usually sold with collision insurance and both are typically required if you have a car loan or lease.
How does collision insurance work?
Collision insurance pays to cover repairs or replacement of your vehicle up to its actual dollar value, minus your car insurance deductible. This coverage applies whether or not you are at fault for the collision.
If you’re considering adding collision coverage to your car insurance policy, figure out approximately how much your vehicle is worth so you can buy appropriate coverage.
How much does collision insurance cost?
Collision insurance costs an average of $814 per year, according to data from our study of rates. Here are average annual rates by car insurance company.
| CAR INSURANCE COMPANY | AVERAGE ANNUAL COST OF COLLISION INSURANCE | LEARN MORE | ||||
|---|---|---|---|---|---|---|
| $1,372 | Compare Rates Compare rates offered by participating partners | |||||
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| $882 | Compare Rates Compare rates offered by participating partners | |||||
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| $610 | Compare Rates Compare rates offered by participating partners | |||||
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| $727 | Compare Rates Compare rates offered by participating partners | |||||
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| $841 | Compare Rates Compare rates offered by participating partners | |||||
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| $742 | Compare Rates Compare rates offered by participating partners | |||||
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| $799 | Compare Rates Compare rates offered by participating partners | |||||
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| $657 | Compare Rates Compare rates offered by participating partners | |||||
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| $674 | Compare Rates Compare rates offered by participating partners | |||||
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 Safe Auto | $1,402 | Compare Rates Compare rates offered by participating partners | ||||
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| $680 | Compare Rates Compare rates offered by participating partners | |||||
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| $566 | Compare Rates Compare rates offered by participating partners | |||||
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| $638 | Compare Rates Compare rates offered by participating partners | |||||
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 Westfield | $808 | Compare Rates Compare rates offered by participating partners | ||||
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How much you’ll pay for collision insurance will depend on several factors, such as your:
- Address.
- Age.
- Deductible.
- Driving record.
- Value of car.
Lower deductibles typically mean higher premiums, though if you want to save on your collision insurance, you can choose a higher deductible.
Collision coverage deductibles and limits
Collision insurance features some important terms that you should know if you’re shopping for a policy: deductibles and limits. These factors contribute to the formula that determines how much you’ll pay for your collision insurance policy, and how much the car insurance company will pay out if your car is damaged or totaled.
The deductible is the amount the insurance company will deduct from your claim check. Typically, the higher your deductible, the lower your premiums.
If you have a $100 deductible, you’ll have higher premiums than if you have a $2,000 deductible, because the insurance company will have to pay more for the cost of the repairs and replacements if you file a claim.
The limit of your collision policy is what your car is worth today, otherwise known as its value. This is the highest dollar amount your insurance company will compensate you for if your car is a total loss, meaning the repairs cost more than its value.
Your vehicle’s value factors into how much you’ll pay for your policy, along with the deductible.
Why buy collision coverage?
So, you may be wondering, do I need collision insurance? When considering whether to add collision coverage to your car insurance policy, keep in mind that having it could provide peace of mind for a variety of scenarios in which your car can be seriously damaged or deemed a total loss.
Collision insurance pays for damage to your car if you collide with another vehicle or object (regardless of who is at fault), hit a pothole, your car rolls over or you’re the victim of a hit-and-run accident.
If you’d be unable to pay out of pocket to repair or replace your car in any of those situations, consider purchasing collision coverage.
Collision insurance FAQs
No state requires collision coverage in order to drive, but it is typically required by your lender when you have a loan or lease on your vehicle.
If your leased or financed car is damaged in a crash, the financial institution that technically owns your car wants to ensure that you will be compensated to properly fix the car or to pay off the loan if it is totaled.
Buying the right amount of collision insurance for you and your car is generally worth it, though that amount varies based on your car’s actual cash value.
Liability insurance is typically mandated by your state of residence. This coverage compensates other people for their damaged property and medical bills in accidents you cause. It also pays for your legal defense if you’re sued following the accident. Liability insurance has no deductible.
Collision insurance is an optional coverage that compensates you for damage to your vehicle in specific scenarios, such as a crash with another vehicle, a collision with a stationary object or a single-car rollover accident. Collision insurance has a deductible.
Collision insurance pays for damage to your vehicle from a collision with another vehicle or object, such as a guardrail. It also pays for damage if your car rolls over or is involved in a hit and run.
Comprehensive insurance pays for damage to your vehicle from causes other than a collision, such as a storm, natural disaster, theft, vandalism, animals, fire or falling objects.
Compare these optional car insurance coverages: Comprehensive vs. collision insurance.
If you own your car outright and it has a low dollar value, you can likely skip collision insurance. With a low-value car, the deductible required to make a collision insurance claim may not be worth it.
If you have an old or low-value vehicle, you can probably drop collision insurance without incurring significant financial risk.
“If your vehicle isn’t worth much more than the deductible you would need to pay when filing a collision claim (example: you have a $1,000 deductible and the actual cash value of your vehicle is only $1,500), you may want to consider dropping the coverage to reduce the cost of your premium,” said Friedlander.
Looking for ways to save on car insurance? When to drop collision and comprehensive insurance.
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