While your car repairs should be covered by the other driver’s liability insurance if they’re responsible for the accident, collision insurance is the only policy that covers your own car repairs when you’re at fault. You aren’t required by law to carry collision coverage, but you’ll most likely need it if you intend to finance or lease a vehicle.

What is collision insurance?

Collision insurance is a type of car insurance that covers damage to your vehicle from most types of car accidents. It’s one of the two main components of physical damage insurance, along with comprehensive coverage.

Physical damage coverage is often sold alongside liability insurance and other state-mandated coverage types as a “full coverage” car insurance policy.

Is collision insurance required?

Unlike the other parts of a full coverage policy, comprehensive and collision insurance aren’t required by law for drivers in any state. However, if you plan on financing or leasing your vehicle, it’s likely that your lender or lessor will require you to maintain physical damage coverage to protect their interest in your car until you’ve finished paying it off.

What does collision insurance cover?

Collision car insurance can cover vehicle damage stemming from car accidents, collisions with stationary objects, and single-vehicle rollovers. Read the following sections for specific examples of situations where your collision coverage may take effect.

Accidents with another vehicle

As its name suggests, collision insurance provides coverage for your car repairs anytime you collide with another vehicle. Examples of covered car accidents include these:

• Rear-end collisions
• Side-impact (T-bone) crashes
• Head-on collisions
• Sideswipe collisions
• Fender benders
• Multivehicle pileups
• Hit-and-runs
• Accidents where you’re at fault or the other driver is uninsured and no liability coverage is available

Collisions with fixed objects

Your collision insurance policy may also step in if your car is damaged after you crash into an object besides another vehicle, such as the following:

• Telephone pole
• Streelight
• Stop sign
• Guardrail
• Tree
• Building
• Fence
• Fire hydrant
• Construction barricade

Single-car accidents

Collision insurance can cover incidents that result in damage to your car even if there aren’t any other vehicles or objects involved. Here are examples of situations that may be covered:

• Hydroplaning
• Swerving into a ditch to avoid a deer
• Rolling over after running over a pothole, a curb, or some other road hazard
• Overturning after slipping on black ice
• Flipping over due to a sudden tire blowout

What isn’t covered by collision insurance?

Auto collision insurance generally excludes coverage for the following losses:

• Collisions with animals
• Theft
• Vandalism
• Weather-related damage
• Damage to someone else’s car or other property
• Bodily injuries experienced by you, a passenger, or another driver

Many of these losses are covered by other coverage types, such as comprehensive insurance, liability insurance, medical payments coverage (MedPay), or personal injury protection (PIP), depending on your policy and state. 

How collision insurance works

The upcoming list explains the process of filing a claim on your collision insurance coverage and receiving reimbursement after a covered loss:

1. You collect evidence to support your claim (for example, photos of the damage to your car) and submit relevant documentation to your insurance company.
2. If the claim is valid, your collision coverage applies regardless of who is at fault for the accident.
3. Upon approving the claim, your insurance company subtracts a deductible from your payout—usually ranging from $250 to $1,000.
4. If your car can be fixed, your insurer pays out the cost to repair your vehicle, up to your policy’s coverage limit.
5. After a total loss, your insurer pays out your policy’s coverage limit, which is typically set at your car’s actual cash value—or its current market value when accounting for depreciation factors, such as mileage or wear and tear.

Collision insurance vs. comprehensive insurance

While collision insurance covers most types of accident-related vehicle damage, comprehensive auto insurance protects your car against external events, such as theft, windstorms, water damage from floods, vandalism, fire, and animal strikes.

These two physical damage coverage types work in tandem to cover most sources of damage to your car—besides wear and tear or other preventable losses.

Collision insurance vs. liability insurance

Auto liability insurance differs from collision insurance in that its primary purpose is to cover medical and repair expenses for others after you’re held liable for an accident that injures them or damages their property—it doesn’t provide any coverage for your own medical or repair expenses if you’re liable. Liability coverage is required by law in nearly every state.

How much does collision insurance cost?

Collision insurance costs around $40 per month on average, according to the most recent data from the National Association of Insurance Commissioners. When calculating your premiums, a car insurance company may consider the following factors:

• Driving record
• Annual mileage
• Location
• Type of car you drive
• Policy details, such as the deductible you select
• Personal details, like your age, gender, and credit score (these rating factors may be restricted in some states)

Is collision insurance worth it?

Collision insurance may be worthwhile due to how expensive it can be to replace a car after a total loss without coverage. On average, new cars cost nearly $50,000 as of May 2026. A basic collision insurance policy can at least ease the financial burden of paying for a new vehicle in the event that you’re held responsible for a serious car accident.

Remember: Collision insurance generally pays your vehicle’s actual cash value (ACV) after a total loss—not the cost to buy a brand-new replacement vehicle. 

When should you drop collision insurance?

Collision car insurance may cease to be cost-effective as your vehicle gets older and drops in value, since the monthly premiums may not justify the potential payout in the event of a total loss. Insurance experts generally recommend dropping physical damage coverage from your auto insurance policy if you’re spending more than 10% of the value of your car on collision and comprehensive premiums.

Collision insurance at a glance

1. Collision insurance is a type of auto insurance policy that covers damage to your vehicle after an accident—even if you’re at fault for the collision.
2. Physical damage coverage refers to the combination of comprehensive and collision insurance. Both policies are often bundled together with state-required coverages in full coverage car insurance.
3. Drivers aren’t required by law to carry collision insurance, but it’s often mandatory if you are financing or leasing your car.
4. Your collision policy might provide coverage if you strike another vehicle, crash into an unmoving object, or wreck your car without hitting another vehicle or object.
5. Collision coverage doesn’t cover everything, including medical bills or property repairs for others, replacements after your car is stolen, or repairs after your car is damaged by a storm or some other external force. You’ll need another policy, such as liability and comprehensive insurance, to protect yourself from those.
6. The limit for your collision insurance is generally set at your car’s actual cash value, and a deductible will be subtracted from your payout amount.
7. According to the most recent data available, collision insurance costs an average of about $460 per year. Your premiums may vary based on factors like your driving record, mileage, location, and personal details.
8. Collision insurance is generally a wise investment for newer and more expensive vehicles, but it may not make sense for you if your car is worth less than 10 times the cost of coverage.

How to save on collision insurance

There are simple, practical steps you can take to secure a lower premium on your collision insurance coverage. For example:

• Compare quotes from three or more insurance carriers.
• Ask if you are eligible for any discounts, such as an anti-theft device, defensive driving, good student, or affiliation discount.
• Raise your collision deductible amount—as long as you have enough money saved up to cover it in case you need to file a claim.
• Bundle homeowners and auto insurance policies from the same insurer.
• Manage your debt to avoid a poor credit score.
• Look into low-mileage discount opportunities—such as pay-per-mile or telematics programs—if you drive infrequently.

The takeaway

Just because collision insurance isn’t a requirement (unless you’re financing a vehicle) doesn’t mean it’s not vital. It’s sort of a catch-all for most types of damages to your own car, be it from crashing into another vehicle, a fixed object, or a roll-over—no matter who’s at fault.

Collision insurance is also handy to protect your car against others who may cause damage to your car but aren’t insured—though it won’t protect any injuries you sustain. And reasonably priced around $40 per month on average, it can well be worth the peace of mind.

Frequently asked questions