Collision insurance is an optional coverage that pays to fix damage to your car when you hit another object or vehicle. Collision coverage also comes into play if your car is hit by another driver who doesn’t have enough insurance to pay for the repairs.
- Collision insurance covers your vehicle for damage that your car sustains when it hits or is hit by, another vehicle or another object.
- Collision insurance only pays up to the actual cash value of your car.
- If you have a loan or lease on your vehicle, then your lienholder will require you to carry this coverage and may mandate the specific deductible amount you have to select.
- Not every issue with your vehicle is covered by collision or comprehensive insurance. An instance such as damage caused by wear and tear, freezing or mechanical breakdown.
What does collision insurance cover?
Collision insurance is part of full coverage, along with comprehensive. Collision covers your vehicle for damage after a collision with a vehicle or object. Collision covers the upset of your vehicle, such as the unintentional rolling or flipping of your vehicle.
Collision coverage allows you to file a claim with your car insurance company and have it pay for damages received in most auto accidents. Collision will pay out, according to the terms and conditions of your policy, if the other driver is uninsured, underinsured, or unknown — or even if you are at fault.
Collision doesn’t cover any and all damages, so comprehensive insurance covers your car if it is stolen or damaged by vandalism, flood, fire or animals.
Keep in mind, not every issue with your vehicle is covered by collision or comprehensive insurance. For instance, damage caused by wear and tear, freezing or mechanical breakdown are not covered by either coverage — or any other portion of an auto insurance policy.
When receiving a quote for collision coverage, you will need to choose a deductible amount. A deductible is the portion of a claim you’re responsible for paying before your insurance coverage kicks in.
What is full coverage car insurance & what it covers?
Is collision coverage mandatory?
Collision insurance is not required. Most states require property damage liability so your insurer will pay (up to your limits) if you damage other people’s vehicles or property. Still, states do not mandate that you carry coverage to pay for damages to your car.
Liability coverage does not cover your vehicle — it only covers the damage you cause others in an at-fault accident. For auto accident damages to your vehicle to be covered by your auto policy, you must carry collision coverage.
What is the recommended deductible?
Collision coverage does not come with limits; instead, the most it will pay you is the actual cash value of your car, minus your deductible, if it is declared totaled. Experts typically recommend a $500 deductible unless you have substantial savings.
Typically, the range you can choose for your deductible is anywhere from $100 to $1,500 — deductible choices vary according to state law and insurance company guidelines. Most car owners choose a deductible of between $250 and $1,000.
Generally, the higher the deductible, the less expensive your premium will be. So, a higher deductible can substantially lower the cost of insurance premiums, but you’ll have more to pay out of pocket before your collision benefits kick in.
Example: How collision deductibles workIf you set your deductible at $1,000 and your car sustains damages of $1,500, you will be responsible for $1,000 and your insurance company will pay $500.
Deductibles are due per incident, so your deductible amount is due when a claim is made.
Read more: Why raising your car insurance deductible lowers your rates
Do I need collision car insurance?
To determine if you need collision insurance, figure out the value of your car, and then take into account your deductible amount. Collision only pays up to the actual cash value of your car. So, if your car isn’t worth much, is a second vehicle or you can afford to replace it yourself, you don’t need collision coverage.
Collision car insurance coverage recommendationsHere are the factors to consider to determine if you need collision car insurance coverage:
- If your car is less than 10 years old, you should consider buying collision coverage
- If your car is older than 10, buy collision coverage if your car is worth $3,000 or more.
- Buy collision coverage if you can’t afford to replace your car after an accident.
How much does collision coverage cost?
According to a CarInsurance.com rate analysis, the average rate for collision coverage is $526 per year, for a full coverage policy with a $500 deductible.
In the table below, see how states compare when it comes to annual collision car insurance rates. Search for your state to see what you can expect to pay each year for collision coverage.
| State | Average Annual Collision Rate |
|---|---|
| Virginia | $381 |
| Washington | $383 |
| Iowa | $391 |
| Minnesota | $391 |
| Ohio | $403 |
| Nebraska | $408 |
| Maine | $408 |
| North Carolina | $416 |
| Utah | $417 |
| South Dakota | $417 |
| Idaho | $430 |
| North Dakota | $431 |
| Oregon | $443 |
| New Jersey | $450 |
| New Mexico | $456 |
| Wisconsin | $461 |
| West Virginia | $463 |
| Vermont | $466 |
| Kansas | $468 |
| Missouri | $473 |
| New Hampshire | $478 |
| Illinois | $479 |
| Arizona | $487 |
| Florida | $489 |
| Mississippi | $492 |
| Tennessee | $505 |
| Colorado | $511 |
| Indiana | $513 |
| Delaware | $524 |
| Texas | $529 |
| Montana | $540 |
| Oklahoma | $541 |
| Georgia | $543 |
| Massachusetts | $555 |
| Hawaii | $559 |
| Alabama | $563 |
| Arkansas | $573 |
| Kentucky | $573 |
| Maryland | $580 |
| Nevada | $596 |
| South Carolina | $609 |
| Pennsylvania | $618 |
| Alaska | $629 |
| DC | $647 |
| Wyoming | $653 |
| Louisiana | $670 |
| Connecticut | $686 |
| New York | $700 |
| Rhode Island | $728 |
| Michigan | $921 |
| California | $997 |
Methodology: CarInsurance.com commissioned Quadrant Information Systems in 2018 to field rates for 100/300/100 full coverage with a $500 deductible from up to six major insurers.
What happens if I don’t have collision coverage?
Without collision coverage, you may be left to pay out-of-pocket for your car’s repairs unless there is someone else found liable for the damages, such as an at-fault driver who has property damage liability coverage with which you can make a claim through.
Or if you are hit by an uninsured motorist and have uninsured motorist property damage (UMPD) coverage under which you can make a claim.
With a high-value car, you will want full coverage whether you have financed it and may consider gap coverage if you’re still making payments on it.
Suppose you have an older car with a low value (without a lease or loan). In that case, you may not want to pay for collision coverage since if your car is damaged, or totaled, the small compensation amount you’d receive from your auto insurance company may not be worth the premium.
Understanding how much your vehicle is worth can help you determine if collision coverage is worth the cost. Find out the current value of your car by using an appraisal tool like Kelley Blue Book.
Will collision cover a dent if I repair it myself?
If a collision claim is filed on some light body damage to your car, it’s perfectly acceptable to fix it yourself and have the insurance company pay you directly. The only exception may be if your policy states you must use preferred body shops, but that is rare and only legal in some states.
When dealing with your insurance company, explain that you will fix the damage yourself and that you want the money paid to you. It is strongly recommended that you only do this for small dents — if there is any frame damage, take the car to a body shop.
– Michelle Megna contributed to this story
