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What is this Collision Coverage on My Policy?

Collision Coverage

When purchasing auto insurance, you’ll have the option to select many other coverages designed to help you repair your own car after an accident. One of these options is Collision coverage. Collision helps pay to repair or replace your car if it’s damaged in an accident with another vehicle or stationary object (eg. a tree, fence, or sign). It may also provide cover for single-car accidents, like a rollover. Some people get confused and think that Collision or Comprehensive separate insurance, but they aren’t, they are coverages offered on your auto insurance policy.

Collision is not mandatory, but you may be required by a bank or leasing company if you’ve financed your vehicle payments.

What does “collision insurance” cover?

Collision is designed to protect your insured vehicles, not other people’s property. The coverage provides protection for several different driving mistakes. Some examples are:

  • Accidents with other motor vehicles
  • Accidents with stationary objects (guardrail, street sign, phone pole, pothole, garage, mailbox, house, tree, etc.)
  • The overturn or rollover of your insured vehicle
  • Damage caused by a hit-and-run accident 

Should I buy collision coverage?

Often, a car is one of the larger purchases people make, and can possess real value. For most of us, we can treat our car as a toss-away item that’s easily replaced. So, like your home, it should be covered. It’s pretty simple, without collision coverage, you could be out thousands of dollars if your car is damaged or totaled in an accident.

When you buy collision coverage, you are adding another coverage to your auto insurance policy. This will increase the premium you pay. However, it will help protect the equity you have in the vehicle. Maybe you recently purchased your vehicle and you don’t have any equity yet, collision coverage can help pay off the balance owed on the vehicle. In fact, most lenders will require you to have collision coverage if you lease or finance your car.

Over 75% of our policyholders add collision coverage to their auto policy.

Do I always need collision coverage?

Is your car paid off? If it is, there are only a small number of circumstances that justify not buying collision coverage:

Your car isn’t very valuable: If the value of your car isn’t more than a few thousand dollars, may be unnecessary, and it’s certainly not worth buying with a large deductible. When your car has little value, it may make more sense to simply save the monthly premium you would pay, creating a small reserve, you can use to replace the car if it’s damaged in an accident.

Your vehicle is in storage: If you car is stored in a save place and not driven, then you may not want to purchase collision coverage. If you policy allows you to purchase Comprehensive coverage only, than that makes sense as it will protect you against theft, vandalism, fire, glass breakage, and weather-related damage. Collisions are not very likely.

Your car is covered on another policy: If your vehicle is insured on a family member’s policy with collision coverage, and is kept overnight at the address you share with that family member, you likely don’t need to add collision to your own policy. In fact, if you’re listed as a driver on that person’s policy, and talk to your insurer or agent to ensure you and your car are properly protected, you may not need to purchase a policy at all (assuming that’s your only car).


Using our car insurance calculator you can determine if collision coverage is right for you. It can also help you understand the right deductible amount that fits your needs.

Does an older car need collision coverage?

The specific age of a vehicle is not really a determinant of for buying collision coverage. What you really want to know is the value of your car when deciding to buy a collision. If your old vehicle carries enough value to warrant collision coverage, then you should consider buying the protection.

Regardless of your car’s age or value, if you don’t have the funds to immediately buy a new car should yours be totaled from an accident, you should carry collision coverage.

What’s the difference between comprehensive and collision insurance?

Well, collision protects against damage to your car from hitting another vehicle or object, regardless of fault. On the other hand, Comprehensive covers incidents that are out of your control, like theft, vandalism, striking an animal, broken glass, fire, and weather-related incidents. Some insurance companies, require you to have comprehensive if you purchase collision, but you may carry comprehensive coverage separately.

Common questions about collision coverage

How much does collision coverage cost?

Collision coverage will vary from carrier to carrier. The cost for the coverage is influenced by several factors, like your age, driving history, and the make and model of your vehicle.

Will my collision coverage carry over to a rental car?

It can. Not all insurance companies allow the extension of coverage to short-term rentals, but many will. If your company allows this form of coverage and you rent a vehicle, typically, it will be insured as if you were driving your own car. To be certain if your insurance company extends coverage to rental vehicles, ask your insurance agent.

What if the accident isn’t my fault?

If another driver hits your car and they’re deemed at-fault, their insurance company should pay for your vehicle’s repairs. If the at-fault driver has no insurance or is underinsured and you don’t carry uninsured motorist property damage, your collision coverage can pay to repair or replace your vehicle.

What deductible should I choose?

Select a deductible you can afford to pay. While a higher deductible will lower your premium, the savings may not be worth what you’ll have to pay out of pocket in the event of a collision claim. When deciding on a deductible, consider the value of your car, and how much you’re willing to pay out of pocket.

If my car is totaled, will collision pay off my car loan or lease?

Not always, collision insurance typically pays the fair market value of your vehicle. That may not be the same as the outstanding balance of a loan or lease. If that isn’t enough to satisfy what you owe on your car loan, gap coverage can help pay the remaining balance.

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