To understand what auto collision insurance is, you first need to be aware that auto insurance comes in several parts. Liability coverage is basic and required in almost all states. Collision, on the other hand, is an optional type of insurance that helps pay for the damage to your car following a collision. It’s part of a full coverage insurance policy and may be required if you have a car loan or lease. Bankrate’s insurance editorial team took a close look at collision insurance coverage to help you make the best decisions for your own insurance policy.

What is collision insurance?

Collision insurance is part of a full coverage car insurance policy, along with comprehensive coverage. Together, these two coverage types pay for damage to your vehicle, regardless of fault, in an accident.

What does collision insurance cover?

Collision covers damage to your vehicle caused by colliding with something. This includes damage caused by:

  • Hitting another vehicle
  • Striking a stationary object like a tree, pole or mailbox
  • Colliding with a building

One caveat is colliding with an animal, such as a deer. That type of damage is covered by comprehensive coverage.

If you are not at fault for an accident, the other driver’s property damage liability should take care of the damages to your car. Sometimes car insurance claims are lengthy, though, and you might want your car fixed more quickly. You could choose to pay your collision deductible and use your coverage to fix your vehicle. Your company will then pursue the other party’s insurance company to receive a payout from their property damage liability. This is a process called subrogation.

What doesn’t collision insurance cover?

Collision auto insurance does not cover everything. Here are a few things that are excluded:

  • Damage caused by theft or vandalism
  • Animal damage
  • Fire or water damage
  • Damage from a natural disaster or bad weather like hail
  • Intentional damage

With the exception of intentional damage, which is never covered by insurance, these perils are covered by comprehensive coverage.

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Do I need collision car coverage?

You might. If you have a loan or lease on your car, collision insurance is likely required as part of your financing terms. In this case, lenders often require that you buy a policy that includes both comprehensive and collision coverage.

If you own your vehicle outright, the choice to buy collision insurance is up to you. Typically, you must also buy comprehensive to have access to collision (although you can usually buy comprehensive without collision), so keep that in mind as you get auto quotes for different car insurance coverage types.

If you are on a tight budget and looking for the most affordable coverage possible, you may want to consider just buying your state’s minimum coverage. Generally, this will include only a minimum amount of liability insurance. Collision is not required by state law, so leaving it off your policy is one way to save money. But be aware if you purchase just the minimum required that you will not have coverage for damages to your own car in an accident or other vehicle mishap.

How much does collision coverage cost?

Collision cost varies based on multiple factors, including the kind of car you drive, where you are located and the amount of coverage you want. The average cost of a full coverage policy in the U.S., which includes collision and comprehensive, is $2,545, compared to the average cost of a minimum policy (which does not include collision), which is $741. You may be able to pay less for your full coverage policy based on the amount of coverage you choose and other factors. Raising your deductible is one way to lower your premium, but be careful you don’t increase it beyond what you would be able to pay following an accident.

What should I consider when purchasing collision coverage?

If you’re adding collision insurance to your car insurance policy, you should consider a few things to ensure that the coverage fits your needs:

  • Your premium: Having collision on your policy is likely to increase your overall cost for car insurance because the more coverage you buy, the more you’re likely to pay. If your budget is especially tight but you need or want collision, you might want to compare car insurance rates from several companies to find the most competitive price.
  • Your deductible: Both collision and comprehensive coverage have a deductible, which is the amount you’ll pay out of pocket if you file a claim for those coverage types. A higher deductible will generally lower your rate since you are willing to pay more in the event of a claim. Be sure to choose a deductible level that you can afford to pay.
  • Your overall financial health: If your vehicle is paid off and you aren’t required by a financial institution to buy collision insurance, think about your overall financial situation. If you can handle the financial burden of repairing or replacing your vehicle out of pocket, you might opt to go without collision. But if you would need the insurance coverage to fix or replace your vehicle after a claim, it’s probably a good idea to buy collision insurance.

Frequently asked questions

    • Comparing collision vs comprehensive insurance is a bit like putting a puzzle together. Both comprehensive and collision pay for damages to your vehicle, but they cover different scenarios. Collision covers damage caused by you colliding with something. Usually, this is another vehicle or a stationary object. Comprehensive coverage is sometimes called “other-than-collision coverage,” and it covers non-collision losses like fire damage, theft and vandalism, and damage caused by weather events. Comprehensive also covers damages caused by hitting an animal.
    • It depends. If you have a loan or lease on your vehicle, no matter the age, you’ll likely be required to carry both collision and comprehensive. If you own your car in full — again, no matter the age — the decision to buy full coverage is up to you and will depend on your financial situation. Even with older cars, if you don’t have the finances to pay for repairs or a replacement vehicle if yours is totaled, you may want to keep collision.
    • A vehicle may be considered a total loss if it’s stolen and not able to be recovered or if the damages cost more to repair than the value of the car. “Totaling” a vehicle doesn’t mean your car has to be completely smashed up; it just has to mean that the repairs cost more than the car is worth. In that case, your car insurance company will offer to pay you the value of the vehicle and then take legal ownership of your car. You can choose to retain your vehicle if you want to, but you’ll probably have to remove your full coverage until you can prove that the repairs are done. Even then, since you’ve been paid for the value of the car before, you won’t get as much in any future claims.
    • Like many other forms of insurance, car insurance often involves a deductible. Your car insurance deductible is the amount of money you must pay out of pocket when filing a claim to cover further costs. Minimum coverage liability insurance does not involve a deductible, but if you have full coverage auto insurance, then there will be a deductible on both your collision and comprehensive coverage. You get some say in how high or low your deductible is, but lowering your deductible often results in higher premiums. You should ensure that you feel comfortable paying your deductible with no notice before you decide which deductible level is right for you.