What Is Collision Insurance?

Here’s how it works:

1. Your car is damaged in an accident.
2. You report your claim to your insurance company and pay your deductible.
3. Your car insurance company pays to repair or replace your vehicle.

Collision insurance applies when your car impacts another vehicle or object.

Collision insurance can cover:

1. Damage to your car when you’re at fault.
   Example: The car in front of you stops short, and you rear-end it, causing damage to your front bumper.

2. Damage to your car when your friend or family member is driving it.
   Example: Your cousin borrows your car when he visits for the weekend. He crashes it, causing damage to the mirror and door.

3. Damage to your car when you hit a tree or other object.
   Example: Your car skids on black ice and you slam into a tree. Significant damage is done to your car.

4. Damage to your car if it flips.
   Example: You take the exit too quickly and lose control of your car. The car overturns, causing damage to the roof, windows, and hood.

5. Damage to your car from another car.
   Example: In the parking lot, another driver opens their door into your car, leaving a dent.

Does collision cover damage caused by animals?

No! Although it might seem like hitting an animal is similar to hitting another car or a tree, it’s not. Impact with animals is covered under comprehensive (other than collision) insurance.

Comprehensive insurance covers damage to your car from events that are out of your control, such as fire, theft, hail, a fallen tree branch, or impact with an animal.

Who needs collision insurance?

Collision insurance helps you pay to repair or replace your vehicle if you're at fault. Consider these factors when deciding whether you need collision coverage:

• Is your car less than five years old? Cars depreciate in value over time, which means that it might not be worthwhile to purchase collision coverage for an older car.

• Could you afford to repair or replace your car if you had an accident? Collision insurance can help to get you back on the road after an accident, without the sudden large expense of repairing or replacing your car. The deductible is usually higher than comprehensive insurance, but, depending on your situation, it could be worth it.

• What is the actual cash value of your car? If the cost of collision coverage is more than 10% of your car’s actual cash value, you might be spending more than it's worth to protect the vehicle.

• Do you finance or lease your car? If you do, your lender might require you to purchase collision insurance for your car.