What Is Collision Insurance?

What Is Collision Insurance?

Collision insurance pays for repairs to your own car after you hit another vehicle, collide with a stationary object, flip over or drive over potholes. This type of coverage kicks in even when you're at fault for an accident.

Your coverage limit—the maximum amount your insurer will pay toward a claim—is usually set as your car's actual cash value. When buying coverage, you'll select your deductible, which often ranges from $250 to $1,000. The deductible is subtracted from any claim payout. So, if you file a claim for $5,000 in car repairs and you have a $500 deductible, your insurer pays the mechanic $4,500.

Learn more: How Does an Insurance Company Determine Car Value?

What Does Collision Insurance Cover?

Collision insurance pays for repairs to your car when it's damaged in certain situations. Some of those situations include:

• Single-vehicle accidents: If you hit a stationary object, like a telephone pole or building, collision insurance can pay to repair your car.
• Collisions with other vehicles: If you cause an accident where you hit another vehicle, your collision coverage pays for your own car repairs.
• Hit-and-run: If another driver hits your parked car and flees the scene, your collision insurance may cover you.
• Car rollovers: Collision insurance also covers you if your car flips over and sustains damage.
• Pothole damage: Driving over a pothole can damage your car's steering, suspension, hubcaps and tires. Collision insurance helps cover the costs of this damage.

What Is Not Covered by Collision Insurance?

Collision insurance won't cover the following incidents, but other types of car insurance may kick in.

• Theft and damage to your vehicle not related to driving: Comprehensive insurance covers theft and damage from fire, flood, vandalism, hail, falling objects, collisions with animals and other hazards.
• Car maintenance: Car insurance generally won't pay for costs associated with malfunctions and normal wear and tear. You can, however, buy roadside assistance to cover emergency services if your car breaks down.
• Legal fees, property damage and medical costs: When you cause an accident, liability coverage helps cover the medical bills for the other driver and their passengers, the other driver's car repairs and your legal costs.

What's the Difference Between Collision and Comprehensive Insurance?

Both types of coverage can pay to repair or replace your car. The key difference between collision and comprehensive coverage is how the damage occurs in an incident.

Collision covers you when you're driving and in control of the vehicle. On the other hand, comprehensive covers things not in your control, such as natural disasters, theft and vandalism, or even a collision with a wild animal.

How Much Does Collision Insurance Cost?

Collision insurance costs $290 a year on average, according to the Insurance Information Institute (III). However, that amount can vary widely depending on several factors, such as:

• Your driving record
• The value of your vehicle
• Your deductible
• Your location
• How much you drive
• Personal details, such as marital status, age and gender
• Your insurance company
• Your credit score in some states

Full coverage car insurance, on the other hand, costs an average of $2,304 annually, according to Experian data.

Do I Need Collision Insurance?

Drivers aren't legally required to buy collision insurance in any state. Still, 76% of drivers in 2021 bought collision insurance, according to III.

Consider buying collision insurance when:

• You lease or finance your vehicle and the lender requires it.
• You have a high-value car.
• You don't want to pay the full costs of repairs after a car accident.
• You can't afford to replace your car if it's totaled.

You may consider skipping collision insurance when:

• Your car is only worth a few thousand dollars.
• You can afford to buy a new vehicle if your current car is totaled.
• You can pay for repair costs after a car accident.

Learn more: How Much Car Insurance Do I Need?

Frequently Asked Questions

The Bottom Line

Although it's not required, collision insurance could make sense for many drivers. It helps you avoid high repair bills or replacement costs. Simple steps such as increasing your deductible and keeping your driving record clean can help to keep your collision insurance premiums low, while still providing the peace of mind you need.

You can shop around for lower car insurance rates using the Experian auto insurance comparison tool. You'll receive quotes from top auto insurance companies, allowing you to make a side-by-side comparison and find the right coverage for your needs.