How Much Does Collision Coverage Add to Your Auto Insurance Premium?
Understand the cost of adding collision protection to your auto policy and when it makes sense
Collision coverage is optional but often one of the most expensive parts of your auto insurance. It pays to repair or replace your car if you’re in an accident—regardless of who’s at fault. But how much does it really increase your premium?
This question becomes especially important when your vehicle is older, fully paid off, or when you’re reviewing your policy to cut unnecessary costs.
What Collision Coverage Typically Costs
The cost of collision coverage varies based on your vehicle, driving record, and location. In Canada, it generally adds 20 to 50 percent to a standard auto policy.
| Vehicle Scenario | Estimated Annual Collision Premium |
|---|---|
| New vehicle, low deductible, urban driver | $400 – $700 |
| Mid-value vehicle, average deductible | $250 – $500 |
| Older vehicle, high deductible, rural area | $100 – $250 |
Your deductible choice also impacts your premium. Higher deductibles mean lower premiums, and vice versa.
Tip: If your car is worth less than a few thousand dollars, and your collision premium is high, the cost of coverage may outweigh the benefit.
What Affects the Cost
Several factors influence the price of collision coverage:
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Vehicle value and repair cost: Newer or more expensive cars cost more to insure.
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Location: City drivers typically pay more due to higher accident rates.
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Driving history: Tickets and past claims can raise your premium.
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Deductible amount: A lower deductible increases your cost.
Insurance companies weigh each of these when calculating your collision rate, which is why two people with similar cars can have very different premiums.
When the Cost May Be Worth It
Collision coverage is more likely to be valuable if:
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Your vehicle is newer or still financed
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You can’t afford sudden repair or replacement costs
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You drive in dense traffic or higher-risk areas
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Your car is essential for daily commuting
Note: If you lease or finance your car, collision coverage is usually required by your lender.
The Bottom Line
Collision coverage does increase your premium, but it can also protect you from costly repairs or total losses. Reviewing your car’s value, your ability to pay for repairs yourself, and your driving habits can help you decide if the added cost is worthwhile.