What does collision insurance cover?

Collision insurance covers damage to your vehicle from a collision with another vehicle or a single-vehicle accident, such as a collision with a stationary object or a rollover. It applies to your vehicle's damage regardless of fault. Collision would cover all of these accidents:

  • A collision with another car, truck, or van.
  • A collision with a building, fence, or pole.
  • A rollover accident where no other vehicle is involved.

In some cases, where you are not at fault, it may be faster to have your car repaired using your policy than to wait for a claimAn insurance claim is a request you make to your insurance company for coverage after your car is damaged or you have an accident. You can file a claim online, by phone, or in writing. against another driver to be approved. Your insurance company will then subrogate (request reimbursement from the other company) to recover the costs.

What doesn’t collision insurance cover?

Collision insurance doesn’t cover any non-collision events or damage to any other vehicles or objects. It also won’t cover medical bills for you or anyone else. Additionally, collision insurance doesn’t cover hitting an animal. Here are some examples of what’s not covered by collision:

  • The damage to another person’s car, no matter who is at fault.
  • Hitting a deer.
  • Damage from a storm, like hail or a fallen tree branch.
  • Injuries to anyone involved in an accident.

Injuries and damages to others are covered by liability insurance, and comprehensive insurance covers non-collision damage from weather, hitting an animal, or falling objects. Liability insuranceLiability insurance covers sums that an insured becomes legally obligated to pay because of bodily injuries or property damage, or financial losses caused to other people. is required by law in all states but New Hampshire, and both comprehensive and collision are required if you have a loan or lease on your vehicle.

How much does adding collision insurance cost?

Collision coverage costs an average of $1,018 per year with a $500 deductible. It's sold as part of a full coverage policy, which has a total average annual cost of $2,578, making collision coverage about 40% of the premium. A higher deductible will reduce your rates, and vice versa. Additionally, your vehicle and driving record will also impact the cost of collision insurance; a more expensive vehicle costs more to repair, driving up insurance costs, and tickets and accidents increase the risk of a claim.

How does collision insurance work?

Collision insurance works by paying for your vehicle's repair or replacement, minus your deductible, after a covered accident. You file a claim with your insurer, pay the deductible, and the insurer covers the remaining repair cost. If the repair cost is more than the vehicle's actual cash value, the insurer will declare the vehicle a total loss and pay the actual cash value minus the deductible. If another driver was at fault, your insurer may recover its costs from the at-fault driver's insurer through subrogation, and your deductible may be refunded.

These are the steps to a collision claim:

  • File a claim with your insurance company after a covered accident.
  • Pay your deductible, usually directly to the repair shop.
  • Your insurer pays the remaining cost of the repairs; the payment may go directly to the shop or to you to pay the shop (Example: For a $2,000 repair with a $500 deductible, you pay $500 and the insurance company pays $1,500).
  • If repair costs exceed your vehicle's actual cash value, your insurer will declare a total loss and pay the actual cash value minus the deductible; the payment will go to your lender if you have one, or directly to you if you don't.

Does filing a collision claim raise my insurance rates?

Filing a collision claim typically raises your insurance premium at renewal, because insurers treat a claim as a signal of elevated risk. The rate increase varies by insurer, state, your prior claims history, and whether you were at fault. If another driver was at fault and your insurer recovers costs through subrogation, the impact on your rates may be reduced.

Key factors that affect how much your rate increases after a collision claim:

  • Whether you were at fault for the accident
  • Your prior claims history with the insurer
  • The dollar amount of the claim
  • The state where you are insured
  • Whether your insurer successfully subrogated against the at-fault driver's insurer

Is collision insurance worth it?

Collision insurance is worth carrying when your vehicle's value substantially exceeds the annual premium plus your deductible, and when you can't afford to repair or replace your vehicle out of pocket. Collision is required if you have a loan or lease. Once your loan is paid off, compare the coverage cost to your car's actual cash value to decide whether to keep or drop it.

If you drop collision coverage, you are responsible for all repair costs when you are at fault or in a single-vehicle accident with no other driver involved. If another driver is at fault and carries adequate liability insurance, their insurer should cover your damages, but this is not guaranteed.

FAQ: Collision insurance

What is a collision deductible?

A collision deductible is the amount you pay out of pocket for car repairs after an accident before your insurance covers the rest. For example, if your deductible is $500 and repairs cost $2,000, you pay $500, and your insurance pays $1,500.

Drop collision insurance when your vehicle's actual cash value no longer justifies the annual premium plus deductible. You can't drop it while your vehicle is financed or leased. Once the loan is paid off, compare the coverage cost to your car's current market value to decide.

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