Collision Auto Insurance Coverage Guide

What is collision insurance, and will it pay to repair your car after an at-fault accident?

Definition

Collision insurance is a type of auto insurance coverage that reimburses you for damages to your vehicle due to an at-fault accident.

How Does It Work?

In other words, if you run into another vehicle or object, collision insurance will cover your car’s damages up to its fair market value, after you’ve met your deductible.

What Does It Cover?

Collision insurance covers the following:

• Your car’s damages from accidents where you’re at fault
• Damage from potholes
• Damage from rolling cars

What Doesn’t It Cover?

Collision insurance doesn’t cover the following:

• The other person’s property damages or bodily injuries (liability insurance)
• Damages or injuries from accidents where you were not at fault
• Mechanical wear and tear
• Damages from weather-related events like hail, fires, and floods
• Car theft
• Car vandalism
• Your bodily injuries from an at-fault accident

Collision Deductibles

Unlike liability coverage, collision coverage comes with a deductible. How do deductibles work? If you get into an at-fault accident and your auto insurance company covers your claim, you’ll have to pay the deductible amount before the company will pay for the rest of the damages.

You’ll typically pick out your collision deductible with your agent when choosing a policy. The average deductible amount for collision coverage is $500. The higher the deductible, the lower your premiums will be. Learn more in our deductible FAQs.

Collision Limits

Your collision limit, or the highest amount your insurance provider will reimburse for damage, will be equal to the fair market value of your car. This means that, aside from your deductible, collision coverage will pay for all damages to your car unless they cost more than the car’s fair market value. If the cost to fix any damages exceeds the fair market value of the car, your car is declared a “total loss” or “totaled.” In this case, your insurance company will pay you the car’s fair market value, which you can use to purchase or lease another vehicle.

Not everyone needs collision coverage, but if you have a new car, we recommend it.

Is It Required?

No state requires collision coverage as minimum coverage. That means you won’t get in legal trouble for driving without it.

Collision coverage isn’t available on its own. Rather, it’s an add-on to liability insurance. The average insurance cost for collision coverage is around $200 to $500, based on the most recent data from 2019. Learn more about the cost of auto insurance in this chart.

Want to know more about the differences between collision and comprehensive coverage? See the chart below to learn more about comprehensive coverage.

In sum, comprehensive coverage pays for damages to your car from all events other than collisions, including flood coverage, hail coverage, natural disasters coverage, and sinkholes coverage. If someone steals your car, steals parts of your car, or vandalizes your car, that’ll also fall under comprehensive coverage.

In contrast, collision coverage covers damage from potholes and road hazards, along with at-fault accidents. If a car accident is your fault, collision coverage is what you’ll depend on to get your car repaired or replaced.

To learn more about collision coverage, read our frequently asked questions below. While the law doesn’t require collision coverage anywhere in the U.S., we recommend it except for an old car or a car you’re not driving. Car repairs can cost thousands of dollars, so if an accident is your fault, you won’t want to pay out of pocket for repairs or replacements. If you have collision insurance, your insurer will pay you up to your car’s fair market value.