What Is Collision Car Insurance Coverage?

Collision coverage is a key part of car insurance. Without it, you must usually pay out-of-pocket for your car's repairs. Learn about it here.
Car accident with two cars

Car accidents are very expensive. Even minor damage can cost you thousands of dollars to repair. They’re also very common. The National Highway Traffic Safety Administration (NHTSA) reported 6.7 million car crashes in 2019. That’s why you need auto insurance that protects your car. This is where collision insurance comes in.

Understanding collision car insurance isn’t difficult. But knowing how it works and how it differs from other coverages could save you thousands of dollars. This article will help you learn more about collision auto coverage. We’ll cover:

  • What collision insurance is
  • What collision insurance does and doesn’t cover
  • Pros and cons of getting collision insurance
  • How much collision insurance costs
  • Collision insurance for rental cars
  • Frequently asked questions

What is Collision Car Insurance?

Collision insurance pays for repairs, minus your deductible, when there’s damage to your car. The damage can result from hitting another vehicle or object like a sign, tree, or pothole. Collision also helps pay to replace your car if your insurance company declares it a total loss.

Collision is one part of what many in the insurance world refer to as “full coverage.” You have full coverage when you have the three main types of car insurance on your policy. The three primary types of coverage are collision, comprehensive, and liability insurance.

What Collision Insurance Covers

Collision car insurance covers many types of collisions and accidents. But it’s important to remember that it only covers incidents that are within your control as a driver. This includes:

  • Head-on collisions
  • Rear-end collisions
  • Side-impact collisions
  • Hit-and-runs on your car
  • Accidents involving only your vehicle such as rollovers
  • Collisions with objects like trees, light poles, or fences
  • Any damage caused by potholes

Unlike liability insurance, it doesn’t matter whose fault the collision is. Even if you’re at fault, collision car insurance will pick up the costs.

What Collision Insurance Doesn’t Cover

While it takes care of a lot, collision insurance doesn’t cover everything. There are several ways your car can take damage or become a total loss. Most of these incidents are out of your control. Here are some situations where you can’t rely on collision car insurance:

  • Vandalism to your car
  • Theft of your car
  • Acts of nature such as falling trees or light poles, hail, tornadoes, or earthquakes
  • Collisions with deer, elk, or other animals
  • Any damage to another vehicle in a collision
  • Any injuries of other drivers or people in your vehicle
  • Any injuries that you sustain from a collision
  • Items stolen from inside your car

Comprehensive insurance is a different type of coverage. It covers damage to your vehicle in incidents out of your control. Comprehensive covers most of the incidents listed above. Some states require it before you can get collision insurance.

It’s also important to note that auto insurance doesn’t cover items stolen from your car. To protect your personal property inside your car, you’ll need either homeowners or renters insurance.

Is Collision Car Insurance Required?

No states require collision coverage. However, some car dealers and lenders may ask you to have collision coverage if you finance your vehicle or get a loan. If you own your vehicle outright, you’ll only need to buy what your state requires.

Not having collision car insurance could be pricey in the long run. You’d have to pay all the repair costs out of pocket if you get into a car accident without collision insurance. This is the case even if you’re not at fault and there are extra costs.

You can sue the at-fault driver for varying amounts, depending on your state’s laws. For example, Michigan allows you to sue for up to $1,000. Check your state’s insurance website for more information.

Though not required, collision coverage can have many benefits. Below are some pros and cons of collision car insurance.


  • Peace of mind
  • Save money from costly repairs
  • Get coverage for a totaled vehicle


  • Requires you to set a limit, which could affect your rates
  • You must pay a deductible to claim benefits
  • Premiums could increase after use of benefits

Collision Insurance Deductible/Limit

Like many types of insurance, collision coverage has a deductible. A car insurance deductible is the total amount you’ll pay out of pocket before your coverage pays your claim.

For example, let’s say you have a deductible of $1,000. If you get into a collision where the repairs total $4,000, you’d have to pay the $1,000. After you’ve paid your deductible amount, your insurance will pay the remaining $3,000.

In addition to a deductible, collision car insurance has a limit. In car insurance, a limit is the greatest amount your insurance company will pay for a claim.

The limit for your collision insurance is usually the same as your car’s actual cash value (ACV). The ACV is the cost to repair a damaged vehicle or replace it minus the depreciation. The ACV is also known as the fair market value of your car or vehicle.

Collision Insurance Prices

Insurance prices aren’t a concrete value. There are several factors that leading car insurance companies use to decide collision coverage prices.

Some common factors include:

  • Your driving record
  • How old you are
  • The type of car you drive
  • Where you live
  • Your car’s mileage
  • Your marital status
  • How many claims you’ve filed in the past

These are only a few of the factors that insurers analyze before setting your rate. According to the Insurance Information Institute (III), the average cost of collision car insurance is nearly $290 per year. Even so, prices vary quite a bit from one insurer to the next. That’s why we recommend that you compare quotes from multiple insurers to get the best rate.

Collision Coverage for Rental Cars

When renting a car, your company might mention a collision damage waiver (CDW) or loss damage waiver (LDW). These are common protection plans offered by rental car companies. They provide some coverage for collisions. But these plans aren’t the same as collision car insurance.

A CDW wipes away all costs for a damaged rental car. Keep in mind that these protection plans are normally optional when renting. Often, you won’t need the CDW if you have collision car insurance. But if you get into an accident and you don’t have collision coverage or didn’t opt-in, you’ll end up paying for all the repairs yourself.

Frequently Asked Questions

Q: What happens if I have an accident with no collision coverage?

A: You’re required to pay all repair costs out of pocket. If the other driver is at fault and has liability insurance, they’ll pay for the damages up to their limits. Then, you’d have to cover the rest on your own.

Q: Is collision car insurance required?

A: Collision coverage is optional. But if you’ve financed your car, your lender will require you to add collision to your auto insurance policy until it’s paid off.

Q: Is comprehensive insurance the same as collision insurance?

A: No. Comprehensive insurance covers many events collision insurance doesn’t. Collision covers crashes that are under your control. Think collisions with other cars or buildings or trees. Comprehensive covers incidents that aren’t under your control. For example, if a tree falls on your car while parked, comprehensive would pay for repairs. One way to think of comprehensive insurance is “other than collision” coverage.

Q: Will collision car insurance pay my claim even if the accident was my fault?

A: If you have collision coverage, fault doesn’t matter. Your insurance company will pay for all repairs up to your limits and minus your deductible.

Q: How much does collision car insurance cost?

A: The price of collision auto insurance varies. It depends on lots of factors. These factors include age, geography, gender, and even your vehicle’s mileage. Car insurance companies consider all of these and more when determining cost. And most people get collision and comprehensive together. This usually doubles your total insurance premium, but your car will have outstanding coverage in the event of a wide assortment of incidents that damage vehicles.

Q: Who needs collision car insurance?

A: People with outstanding loans for sure. Also, anyone that feels uncomfortable with risk. Many people sleep better at night knowing they can get their car repaired after an accident. Anyone likely to get into an accident should also consider this type of coverage. Whether you know you’re a bad driver or have unsafe drivers in your neighborhood, collision insurance adds a lot of security.


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