What does collision coverage cover?

Collision insurance pays to repair or replace your vehicle when you're in an accident—whether you hit another car, a pothole, a fence, or another object. It's optional in most states, but if you lease or finance your car, your lender will typically require it along with comprehensive coverage.

Unlike liability coverage, which pays for damage you cause to others, collision covers your own vehicle regardless of who is at fault.

What Does Collision Insurance Cover?

Collision typically covers:

• Impact with another vehicle – Whether you're at fault or not
• Impact with a stationary object – Fence, pole, tree, pothole
• Single-vehicle accidents – Rolling over, sliding on ice into an object

Collision does not cover:

• Non-collision damage – Theft, vandalism, hail, fire (that's comprehensive)
• Damage to the other driver's car – That's property damage liability
• Medical expenses – That's bodily injury or PIP
• Wear and tear – Mechanical failures, normal deterioration

How Collision Works: Deductibles and Limits

Collision has its own deductible—typically $250 to $2,500. You pay the deductible first; your insurer pays the rest up to your vehicle's actual cash value. A higher deductible lowers your premium; a lower deductible means less out of pocket when you file a claim.

If your car is totaled, the insurer pays the actual cash value (market value) minus your deductible.

Do I Need Collision Insurance?

Collision makes sense when:

• You lease or finance – Lenders require it
• Your car has significant value – Worth protecting
• You couldn't afford to replace it – Out-of-pocket would be a hardship

You might skip collision if you drive an older, low-value car and can afford to replace it yourself. A common rule of thumb: if your car is worth less than $3,000–$4,000, the premium may exceed the benefit. Having an emergency fund to replace the car out of pocket also makes dropping collision more feasible. But your situation matters—if you need the car to get to work and can't afford to replace it, collision may still be worth it.

Collision vs property damage in an accident

In an accident, collision covers damage to your car; property damage liability covers damage you cause to theirs. If you're at fault, both apply—your collision pays to fix your vehicle (minus your deductible), and your PD pays to fix theirs (up to your limit). If the other driver is at fault, their liability covers your car and you typically don't use your collision.

How Much Does Collision Cost?

Collision is typically more expensive than comprehensive because collision claims are more common. Premiums depend on your vehicle's value, driving history, location, and deductible choice. Expect roughly $200–$500+ per year for collision, depending on these factors.

Whether to carry collision—and what deductible to choose—depends on your vehicle's current value, your emergency fund, and your loan status. A licensed agent can review your policy and help you decide whether your deductible is calibrated to your budget or whether dropping collision makes sense for what your car is worth today.

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