What Is Collision Coverage?
Collision coverage pays to repair or replace your vehicle when it's damaged in a crash with another car or object, regardless of who caused the accident.
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What Is Collision Coverage Insurance?
Collision coverage pays for damage to your vehicle when you hit another car, a stationary object like a guardrail or telephone pole, or when your car rolls over. It applies whether you caused the accident or the other driver did—your insurer pays your claim first, then pursues reimbursement from the at-fault party if applicable. If repair costs exceed your car's value, the insurer declares it a total loss and pays you the cash value.
Who Needs Collision Coverage Insurance?
Collision coverage is essential if you have a car loan or lease—lenders require it to protect their financial interest in the vehicle. Drivers who commute frequently, live in high-traffic areas, or have newer vehicles benefit most from collision protection.
Apply the 10x rule: if your car's actual cash value is less than 10 times your annual collision premium, consider dropping coverage. Check your vehicle's current value using Kelley Blue Book or NADA guides, then add your deductible to your annual premium—if that sum approaches or exceeds your car's value, collision coverage offers diminishing returns. Review this calculation annually as your car depreciates and premiums adjust.
How Much Does Collision Coverage Insurance Cost?
- Your vehicle's actual cash value—more expensive cars cost more to insure because potential claim payouts are higher.
- Your age and driving record—drivers under 25 or with at-fault accidents in the past three to five years pay significantly higher collision rates.
- Where you live and park—urban areas with higher accident rates and vehicle density cost more than rural locations.
- Vehicle safety features and crash test ratings—cars with automatic emergency braking or high safety scores may qualify for discounts.
- Annual mileage—driving more than 12,000 miles per year increases collision risk and premiums accordingly.
Frequently Asked Questions
Is collision coverage required by law?
No, collision coverage is not legally required in any state. However, lenders and leasing companies typically require it as a condition of financing—your loan agreement will specify the minimum coverage you must carry until the loan is paid off.
Does collision cover hitting a deer?
No, hitting a deer or any animal is covered under comprehensive coverage, not collision. Collision coverage applies when you strike another vehicle or a fixed object like a tree, fence, or guardrail. The distinction matters because comprehensive and collision have separate deductibles and may be purchased independently.
Will my collision premium go down as my car ages?
Typically yes, because collision premiums are partly based on your vehicle's actual cash value, which decreases over time. As your car depreciates, the maximum potential payout decreases, so insurers charge less—but other factors like your driving record and claims history also influence your rate. Review your coverage annually to ensure collision premiums still justify your vehicle's declining value.
Can I drop collision and keep comprehensive?
Yes, collision and comprehensive are separate coverages and can be purchased independently. Many drivers with older vehicles drop collision but keep comprehensive because comprehensive covers a wider range of perils at a lower cost—theft, hail, and vandalism remain significant risks even when collision repair costs aren't justified by the car's value.
Does collision cover rental cars?
Collision coverage typically extends to rental cars if your policy includes physical damage coverage for vehicles you don't own. Check your policy's rental car provisions—many insurers cover rentals up to a certain value or require you to decline the rental company's collision damage waiver. Your deductible still applies to rental car damage claims.
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