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