What is collision insurance and how does it protect vehicle owners?

Collision insurance is a type of auto coverage that helps pay for repairs to your vehicle if it’s damaged in a collision with another car or an object like a fence or light post. Unlike liability insurance, which covers damage you cause to others, collision insurance protects your own vehicle regardless of fault.

Collision coverage is not required by law, but lenders typically require it if you finance or lease your car. It’s often bundled with comprehensive coverage to form what’s commonly referred to as a full coverage auto insurance policy. 

How collision insurance works

Collision insurance is a form of physical damage coverage that pays to repair or replace your own vehicle after a crash. Unlike state-mandated liability insurance, which covers the other driver’s repair bills and medical expenses if you are at fault for an accident, collision coverage focuses exclusively on your car. Whether you hit another vehicle or a stationary object, this coverage helps ensure you aren't stuck paying the full cost of repairs out of pocket.

Here’s how it works:

• What it covers: Helps pay to repair or replace your car after a crash with another vehicle or a stationary object, such as a guardrail. It’s most commonly used when you’re at fault but may also apply if the other driver lacks sufficient insurance. 
• Fault isn’t required: You can file a collision claim regardless of who caused the accident. 
• You pay a deductible: When you file a collision claim, you will pay a deductible, just as you would with homeowners insurance. For example, if you have a $500 deductible on repairs of $3,000, your insurance pays $2,500 and you cover the rest.
• Payouts reflect depreciation: Should your car be a total loss after a covered accident, a standard collision policy would pay out the actual cash value (ACV) of the vehicle. ACV reflects the car’s current market value (with depreciation factored in), minus your deductible — not the amount you paid for the car or the price of purchasing a new, similar model. 

What does collision insurance cover?

Here are several common situations where collision insurance will likely help pay to repair or replace your vehicle:

• Colliding with another vehicle (moving or parked): Whether you accidentally rear-end another car at a stop light or back into a parked car, collision insurance can help cover the damage to your own car. 
• Hitting a stationary object: Striking a fence, street light, tree, or guardrail is typically covered. 
• Single-vehicle accident: Rollovers or hitting debris on the road, for example, generally fall under collision coverage.
• Damage from potholes or rough pavement: Suspension or tire damage from impact is usually covered.
• Accidents caused by weather: If you lose control on an icy road and crash, your collision coverage should apply. 

What is not covered by collision insurance?

Collision only covers impact-related damage. Other losses are handled by different coverage types.

• Non-collision events: Theft, vandalism, fire, falling objects, and weather damage are usually covered under comprehensive insurance.
• Animal-related accidents: Hitting a deer or other animal is generally claimable under comprehensive coverage.
• Medical expenses: Injuries that you or your passengers face typically fall under medical payments (MedPay) insurance, personal injury protection (PIP), or — if another driver is at fault — the other party’s liability insurance.
• Damage to other vehicles: This typically falls under the property damage portion of your liability insurance.

Does collision insurance have a deductible?

Yes. You choose a deductible when buying your policy, and it’s deducted from any claim payout. 

• How you pay it: Your insurer will subtract your deductible from your claim payout. You won’t actually submit a payment to the insurance company.
• Common deductible amounts: Most drivers choose an amount between $250 and $1,000, though higher deductibles may be possible.
• How it affects your premium: Choosing a higher deductible usually means paying less for insurance coverage — and vice versa. A lower deductible will likely raise your premium. Whatever you choose, it’s important to make sure your deductible would be easy to afford in the event you need to file a claim.

Collision vs. comprehensive vs. liability car insurance

The table below helps explain the differences between basic liability, collision, and comprehensive insurance. 

Do you need collision coverage?

Whether you need collision coverage depends on your vehicle, finances, and risk tolerance. Here are some factors to consider.

• Financing or leasing: Your lender is likely to require collision and comprehensive coverage to protect their investment in the vehicle until you pay off your car loan or satisfy your lease term.
• The 10% rule: If collision and comprehensive premiums exceed 10% of the car’s value, some drivers choose to drop coverage. In other words, for an older, lower-value car, the cost of insurance may outweigh the potentially low payout you’d receive after an accident.
• Your ability to absorb loss: If your car is totaled, can you afford to replace it out of pocket? If you can, you might not need collision insurance. But if not, collision coverage can provide vital protection.

Generally speaking, collision insurance is most worthwhile for newer or higher-value cars and for drivers who would struggle to cover major repair or replacement costs on their own.

What happens if I don’t have collision coverage?

Without collision insurance, you’ll typically pay for damage to your car yourself.

• If you cause the accident: Liability insurance will cover damage to the other driver’s vehicle, not yours. 
• If no one else is clearly at fault: If it’s a single-car accident, such as sliding into a guardrail, there’s no other insurer to pay for your damage. 
• If the other driver is at fault: Their liability coverage should pay for your repairs or replacement.
• If the other driver is uninsured or underinsured: If they cause the accident but don’t have coverage, you’ll be on the hook for repairs unless you have collision coverage.

For many drivers, collision car insurance is a safety net, protecting them from potentially large, unexpected repair bills or the need to pay for a new vehicle completely on their own.

Frequently asked questions

Is collision insurance the same as full coverage?

No. Collision insurance is just one part of what people often call full coverage. Full coverage generally refers to a policy that includes minimum liability coverage, plus collision and comprehensive insurance. 

How much does collision insurance cost?

On average, drivers pay roughly $400 a year for collision insurance, according to the latest data available from the National Association of Insurance Commissioners. Your actual cost will vary based on factors including the following:

• Vehicle value and average repair costs
• Your driving record and claims history
• Your ZIP code
• Your deductible

Should I get collision insurance for an old car?

It depends on your car’s actual cash value (ACV) versus your deductible and premium. You can estimate ACV using pricing tools like Kelley Blue Book or Edmunds. If your vehicle is worth only a few thousand dollars — and your deductible is high — an insurance payout for a covered claim may be minimal and paying for coverage may not be cost-effective.

Will my rates go up if I file a collision claim?

It varies by insurer and situation. Generally, insurance companies look at your claims history, the size of the claim, and whether you were at fault for the accident. Even if you’re not at fault, however, they may factor the claim into your pricing at renewal time. Some insurers offer an endorsement (an optional policy add-on) called accident forgiveness that prevents your first claim from causing your rate to increase.