Collision insurance is a type of auto insurance coverage that helps pay to repair or replace your vehicle if it is damaged in a collision with another vehicle or an object, regardless of who is at fault. This includes accidents such as hitting another car, a fence, a tree, or even single-car accidents like rolling over or hitting a guardrail
. Key features of collision insurance include:
- Coverage scope: It covers damages to your own vehicle from collisions with other vehicles or objects, including accidents while parked or hit-and-run incidents
- Fault: Unlike liability insurance, collision insurance pays for your vehicle's damage even if you are at fault in the accident
- Deductibles: You typically select a deductible amount (commonly $250 to $1,000), which is the out-of-pocket amount you pay before insurance covers the rest. Higher deductibles usually mean lower premiums
- Limits: The maximum payout is usually the actual cash value of your vehicle after depreciation, which means you might need to pay extra to replace your car with a newer model if it is totaled
- Exclusions: Collision insurance does not cover damage from theft, vandalism, natural disasters, or hitting animals; these are covered under comprehensive insurance
Collision insurance is often required if you are leasing or financing your car, but if you own your vehicle outright, it is optional. It provides financial protection against costly repairs or replacement after an accident, offering peace of mind especially for newer or valuable vehicles
