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Collision coverage

Collision car insurance pays for your car's damage when you're responsible for an accident.

You need separate collision coverage on car insurance to pay for your own car’s damage, rather than liability, if you’re at fault in an accident. With a few exceptions, many drivers benefit from coverage despite the extra cost, because it repays itself if your car gets major damage or needs total replacement.

What is collision coverage?

Collision insurance is a type of car insurance coverage that pays for physical damage to your own car, including repairs or replacing a totaled vehicle. It kicks in when you cause the car accident up to the maximum payout limit you chose on your policy.

If you have collision coverage, you’ll be covered for most car repair costs that come up after an accident. For example, you may need your car fixed or replaced after these types of accidents:

  • You’re involved in a collision with another vehicle.
  • You’re involved in a collision with a stationary object, like fencing or a guard rail.
  • Your car is rolled or flipped.
  • You experience a hit-and-run — used in some states like California instead of uninsured motorist coverage.

When do I need collision car insurance?

If you’re still paying your car loan off or you’re leasing your ride, your lender probably requires you to have collision coverage. This is because it has a vested interest in the vehicle, and wants to see it paid off or returned.

However, no states legally require you to carry collision coverage. If your car is worth more than you can comfortably afford to replace, it’s a good idea to buy collision coverage, even if you don’t have a car loan. To decide if you need collision car insurance:

  1. Consider your car’s value. If you’re driving a low-value beater car, you could see if collision coverage and its deductible costs a big portion of your car’s value. If so, you might nix coverage to save money.
  2. Factor in your finances. Consider whether you can pay for car repairs, another car or get by without a second car if an accident happens. If you can’t pay to use another car, you might need this coverage even on a low-value vehicle. Paying a few hundred dollars per year for collision coverage could save thousands if your car needs major repairs or has to be totally replaced.
  3. Keep your mileage in mind. You might forgo coverage on a hobby car that you ride on the weekend or any cars that you don’t drive much. Lower mileage means you’re less of a risk for getting in an accident.
  4. Evaluate after paying off your loan. If you’re financing your car, you probably need collision coverage. But set a reminder to figure out your coverage needs after zeroing out that loan.

What collision coverage doesn’t cover

Collision coverage doesn’t cover costs for damage to other people’s property. You’ll need property damage liability insurance for that. It also doesn’t pay for others’ medical expenses — only bodily injury liability insurance will reimburse those expenses.

Also, any damage classified as acts of God or nature is excluded from collision insurance. This might include a tree hitting your car or an angry mob vandalizing your vehicle. You may need comprehensive coverage to pay those costs, and your lender may require both comprehensive and collision if you’re financing your car.

How much does collision coverage cost?

Collision coverage typically costs around $290 a year, according to the Insurance Information Institute. Your actual premium will vary based on a number of factors. Your age, driving record, the type of car you drive, where you live, gender and even your credit score can affect how much you pay. And even those factors vary by state.

Does collision coverage have a deductible?

As with most insurance types, collision coverage comes with a deductible. You’ll choose your deductible when you’re buying this insurance. Then if an accident happens, you’ll pay this amount first before your insurance company kicks in to repair or replace your car.

To decide what your deductible should be, weigh how much car repairs might cost against how much you’d want to pay out of your own pocket. The higher you set your deductible, the less your insurance premiums should cost.

Collision car insurance in action

While cruising in his car, Isaac misses a stop sign and rams into another vehicle in the intersection.

Both Isaac’s car and the other vehicle are in rough shape, so repairs are definitely in order. Isaac’s liability insurance will cover the costs for the other party. Meanwhile, Isaac’s collision insurance will help him with his costs — luckily so, as his bill comes out to $4,500. After Isaac pays his $500 deductible, his insurance covers the remaining $4,000.

With collision coverage, you won’t be blindsided by a massive car repair bill. After you pay your deductible, your collision coverage will absorb the rest of the cost.

Bottom line

You can soften the blow of a steep repair bill by adding collision to your existing car insurance coverage. But don’t be afraid to shop around for the best price. You can find coverage that works for you by comparing car insurers using our insurance comparison tool.

Common questions about collision coverage

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Sarah George is Staff Writer for Small Business Loans at BankRate and formally a personal finance writer at Finder focusing on all things banking and insurance. Her know-how has been featured in such publications as CBS, CNET and, and she was a panelist in Finder’s 2020 money-saving webinar. Sarah earned an English education degree and is a Certified Educator in Personal Finance. See full bio

Sarah's expertise
Sarah has written 134 Finder guides across topics including:
  • Car, motorcycle, home and life insurance
  • Insurance for specific car models
  • Analysis of industry reports
  • Insurance policy comparison

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