What Is Collision Coverage and What Does It Protect You From?
Learn how collision insurance covers damage to your own vehicle after an accident
If you’ve ever worried about the cost of repairing your car after an accident—especially one that was your fault—collision coverage is what steps in to help. Unlike liability insurance, which pays for damage you cause to others, collision coverage is designed to protect your own vehicle.
This matters when you’re financing a car, driving a newer model, or simply want to avoid paying thousands out of pocket after a crash. You might think about this the next time you review your policy or upgrade your vehicle.
What Collision Coverage Actually Pays For
Collision insurance covers damage to your car from hitting another vehicle or object, regardless of who is at fault. It also applies if your car is damaged in a single-vehicle accident, such as hitting a guardrail or pole.
| Covered Situation | Is It Included? | Details |
|---|---|---|
| You hit another car | Yes | Even if you caused the accident |
| Another car hits you | Yes, if no recovery from other driver | May apply if the other driver is uninsured |
| You hit an object | Yes | Poles, walls, fences, and trees are included |
| Single-vehicle crash | Yes | Rollovers or off-road collisions |
| Vehicle damage from potholes | Sometimes | Depends on the policy wording and severity |
Tip: Collision coverage does not cover mechanical failure or normal wear and tear. It only applies to sudden, accidental damage.
How Collision Coverage Works With Deductibles
When you file a collision claim, your insurer pays for the damage to your car, minus your deductible. This is the amount you agree to pay out of pocket when making a claim.
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If your deductible is $1,000 and repairs cost $5,000, your insurer pays $4,000
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Choosing a higher deductible usually lowers your premium
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Some lenders may require a maximum deductible amount if your car is financed
Note: If your car is totalled, your insurer pays up to its actual cash value—minus the deductible. That amount may be less than what you owe on the loan, which is why gap insurance is sometimes recommended.
When Collision Coverage Is Worth Having
Not everyone needs collision coverage, especially if your vehicle is older or worth very little. But in many cases, it’s a valuable part of a full protection strategy.
| Vehicle Situation | Should You Carry Collision? |
|---|---|
| New or financed car | Yes – lender may require it |
| Car valued over $5,000 | Often worth it |
| High-risk driving habits | Yes – more exposure to damage |
| Older car with low value | Maybe not – compare premium vs. payout |
Caution: Dropping collision can save money, but it means you’ll cover all repair or replacement costs yourself after an accident.
How Collision Differs From Other Coverage Types
It’s easy to confuse collision with other types of car insurance, but each plays a distinct role in protecting you.
| Coverage Type | What It Covers | Who It Protects |
|---|---|---|
| Liability | Damage or injury to others | Other people and property |
| Collision | Damage to your vehicle from crashes | You and your car |
| Comprehensive | Non-collision events like theft or hail | You and your car |
Collision Coverage Protects Your Financial Stability After an Accident
Car accidents happen quickly, and repair bills can add up even faster. Collision coverage provides financial support to get your vehicle repaired or replaced—so a mistake on the road doesn’t turn into long-term debt. Whether required by your lender or added for peace of mind, it’s a key part of protecting your mobility and your money.