What is collision insurance?

What does collision insurance cover?

Collision insurance covers damage to your vehicle from an accident where you collide with another vehicle. It will also cover damage from a single-vehicle accident. Examples of accidents where collision insurance applies include:

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.

Collision insurance most commonly kicks in when you are at fault for an accident, but you can file a collision 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. regardless of fault. In some cases, it may be faster to have your car repaired using your policy than to wait for a claim 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.

Some of the above are covered instead by liability insurance (injuries to others), and some are covered by comprehensive insurance (other than collision coverage). Make sure you’re aware of the difference between collision and comprehensive coverage; you may need both.

How much does adding collision insurance cost?

Collision coverage costs an average of $995 a year, based on a $500 deductibleThe deductible is the amount you pay out of pocket for a covered loss when you file a claim.. However, it isn't usually sold individually; the cost is part of the overall premiumThe payment required for an insurance policy to remain in force. Auto insurance premiums are quoted for either 6-month or annual policy periods. when you buy a full coverage policy. The average cost of a full coverage policy is $2,513.

The deductible you choose will have a direct impact on how much you pay for collision coverage.

How does collision insurance work?

Collision insurance applies when you are involved in a crash where there is damage to your vehicle, and another driver's insurance isn't responsible for covering it.

You'll pay the deductible, and your insurer will pay the remainder of the repair cost. Deductibles vary, and the higher your deductible, the lower your premiums will be.

If the cost to repair your car exceeds its value, the insurance company will declare it a total loss and will pay out the actual cash value (again minus the deductible). This is also covered by collision insurance.

Is collision insurance worth it?

Yes, having collision insurance is worthwhile if you can't afford to repair or replace your car out of pocket.

You have to carry collision insurance if it’s required as part of your loan or lease agreement. Other than that, there’s no legal requirement for this coverage.

Once your loan is paid off, you can drop collision coverage from your policy. However, it’s important to be aware that if you drop this coverage, you will be 100% responsible for damages to your car, unless another driver is at fault.

Frequently asked questions

What is 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.