Insurance 101: What is Collision Coverage?

Collision coverage is a type of insurance coverage that pays for damage to your vehicle after a collision with another vehicle or object, such as a tree or guardrail. This coverage helps pay for repairs or a replacement vehicle if necessary. This coverage is typically optional on an auto insurance policy – however, if you have a car loan or lease your vehicle, collision coverage is often required by the lender.

Collision coverage will not cover:

Damages not related to driving your car (hail, theft, etc.)
Damages to another driver’s vehicle
Any medical bills associated with the accident

It’s important to know that collision coverage has a deductible, which is the amount of money a policyholder pays before their insurance company starts paying for covered expenses. You can typically choose your deductible amount for collision coverage, with options ranging across different carriers from $0, $500, and $1,000. The higher deductible you choose, the lower your premium will be each month – but a higher deductible means more money you will have to pay out-of-pocket in the event of an accident.

For more information about collision coverage, visit the Insurance Information Institute, or contact your independent agent.

Source: “What is covered by collision and comprehensive auto insurance?” Insurance Information Institute, https://www.iii.org/article/what-is-covered-by-collision-and-comprehensive-auto-insurance. Accessed 10 Sept. 2024.

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On the Road, New Drivers

Insurance 101: What is Collision Coverage?

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