Collision coverage pays for car damage from accidents with other cars, objects like guardrails or trees, and single-vehicle incidents like rollovers, regardless of who caused the accident. Unlike liability coverage, collision coverage requires you to pay a deductible when filing a claim. Collision coverage then pays remaining repair or replacement costs up to your vehicle's actual cash value.
Collision Auto Insurance
Updated: May 4, 2026
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Key Takeaways
Collision coverage protects your vehicle from accident damage no matter what, but it isn't legally required unless you finance or lease.
Most drivers should choose a $500 deductible because it provides the ideal balance between lower premium costs and manageable out-of-pocket expenses.
Collision alone isn't enough. Add comprehensive coverage for theft, weather, vandalism plus gap coverage if you owe more than the car's actual cash value (what your car is worth today, not what you paid for it).
What Is Auto Collision Insurance?
Why You Can Trust Moneygeek
Mark Fitzpatrick has spent almost a decade analyzing the insurance market, reviewing policy documents and coverage terms across major insurers to give readers clear, accurate guidance. His recommendations are based on independent research and are not influenced by MoneyGeek's insurance company partnerships.
TEENAGE DRIVER?
Teen drivers under 18 need a parent co-signer to buy collision coverage. Due to inexperience and accident risk, teens pay much higher premiums.
What Does Collision Auto Insurance Cover?
Collision coverage won't cover theft, vandalism, weather damage, animal strikes or injuries to people. The scenarios show what collision coverage covers and what it excludes:
You rear-end another car at a red light | ✅ | Collision coverage pays for car damage from crashes with other cars, regardless of who's at fault. You pay your deductible, then collision coverage covers the rest. See a full breakdown of when damage to your own car is covered and what falls outside collision protection. |
Someone runs a red light and hits your car | ✅ | Collision coverage protects your vehicle even when the other driver caused the accident. The coverage handles repairs while your provider pursues the at-fault driver's insurance. |
You swerve to avoid a dog and hit a tree | ✅ | Collision coverage pays for damage from hitting objects like trees, guardrails, or poles, even in single-vehicle accidents. |
Your car is stolen from your driveway | ❌ | Theft isn't covered by collision insurance. You'd need comprehensive coverage to protect against stolen vehicles. |
Hail damages your car during a storm | ❌ | Weather-related damage requires comprehensive coverage, not collision. This includes hail, floods, falling branches and storm damage. |
You hit a deer while driving at night | ❌ | Animal strikes are covered under comprehensive insurance, not collision coverage, even though it involves your moving vehicle. |
Your car rolls over after skidding on ice | ✅ | Rollover accidents are covered by collision insurance regardless of weather conditions that contributed to the loss of control. |
Someone keys your parked car | ❌ | Vandalism and malicious damage fall under comprehensive coverage. Collision only covers crash-related damage. Minor cosmetic damage like door dings and scratches may not be worth a collision claim if repair costs fall below your deductible. Learn when it makes financial sense to file. |
You're injured in the accident | ❌ | Collision coverage only pays for vehicle damage. Medical expenses require personal injury protection (PIP) or medical payments coverage. |
Engine failure causes your car to break down | ❌ | Mechanical breakdowns aren't covered by collision insurance. Consider extended warranty or mechanical breakdown coverage instead. |
A simple rule: collision coverage covers your car when it hits something while moving. Comprehensive covers everything else.
Coverage availability and specific terms may vary by state and insurance company. Always review your policy documents for exact coverage details and exclusions.
COLLISION INSURANCE COST
Collision coverage costs $464 per year on average, according to the National Association of Insurance Commissioners. But rates vary by state based on traffic density, weather exposure and local claim rates. South Dakota drivers pay as little as $307 annually, while California drivers pay as much as $607.
Do I Need Collision Auto Insurance?
Lenders require collision coverage for financed or leased vehicles to protect their investment. For paid-off cars, keep collision coverage if your car is worth more than $3,000 to $4,000 and you can't afford to replace it yourself. Drop collision coverage if your car is worth less than $3,000, you have sufficient savings for replacement or the annual premium costs more than 10% of your vehicle's value.
MONEYGEEK EXPERT TIP
Don't file a collision claim if repair costs are close to your deductible. A $600 repair with a $500 deductible saves you $100 but risks a rate increase that costs more over time.
How Much Collision Auto Insurance Do I Need?
Choose collision coverage that matches your car's current market value, not what you originally paid. Your deductible choice matters, too. A $500 deductible saves about $200 annually compared to $250, but you'll pay that difference when filing a claim.
Skip collision coverage once your car's value drops below $4,000 because premiums often exceed the protection's worth. Consider your driving habits: high-mileage drivers on busy roads should keep collision coverage even on older cars, while low-mileage drivers in quiet areas with solid savings can skip collision coverage on lower-value vehicles.
The sweet spot for most drivers is collision coverage equaling your car's actual cash value with a $500 to $1,000 deductible.
Is Collision Insurance Enough?
Collision coverage alone isn't enough because it only covers your car damage from accidents, leaving you exposed to liability claims, theft, weather damage and medical expenses. You need complete coverage starting with liability as your foundation.
Most drivers need at least 100/300/100 liability limits to protect their assets plus collision coverage matching your car's current value and comprehensive coverage with a $500 to $1,000 deductible for weather damage, vandalism and theft. Without liability coverage, you're personally responsible for property damage and injuries you cause to others, and without comprehensive coverage, you'll pay out of pocket for non-collision incidents like hail damage or stolen vehicles.
Determining coverage by using these steps as a guide:
Calculate your liability exposure
Add up your assets (home equity, savings, investments) and choose liability limits that protect this amount. If you have $200,000 in assets, get at least 250/500/100 liability coverage.
Determine your car's actual cash value
Check Kelley Blue Book, Edmunds, or similar sites for your vehicle's current worth. This amount becomes your collision coverage limit.
Assess your financial cushion
Choose a deductible you can pay comfortably out of pocket. If you have $2,000 in emergency savings, a $1,000 deductible works. Less savings means choosing a lower deductible.
Evaluate your risk factors
High-crime area or severe weather exposure? Add comprehensive coverage. Long commute or high annual mileage? Prioritize higher collision limits.
Review your gaps
Add uninsured motorist coverage if your state allows it and consider rental reimbursement if you can't afford to be without a car during repairs.
Many drivers underestimate liability limits. Coverage that doesn't protect your full assets leaves you personally responsible for the difference after a serious accident.
Auto Insurance Collision: Bottom Line
Collision coverage pays for your car's damage from accidents regardless of who's at fault, but collision coverage is only required if you finance or lease your car. Choose collision coverage with a $500 deductible if your car's value exceeds what you can comfortably replace out of pocket.
Pair collision coverage with comprehensive coverage for theft, weather and vandalism, plus gap coverage if you owe more than your car's actual cash value. Get quotes from at least three insurers to find the best balance of price and service for your situation.
Auto Collision Insurance: FAQ
We answer your most common collision auto insurance questions:
How much does collision insurance cost?
Collision coverage averages $464 annually, according to the National Association of Insurance Commissioners. Your rates depend on vehicle value, driving record, location, age, credit score (where permitted) and other factors. Some states prohibit certain rating factors. Newer cars cost more to insure, while higher deductibles reduce premiums.
What's the difference between collision and comprehensive insurance?
Collision coverage handles moving accidents and hitting objects, while comprehensive coverage handles theft, weather damage and vandalism. Most drivers need both. Together with liability coverage, they create complete vehicle protection.
What collision insurance deductible should I choose?
Choose a deductible you can pay immediately if you need to file a claim. Most drivers select $500 for balanced costs. The Texas Department of Insurance shows that increasing from $500 to $1,000 can save up to 20% annually.
Does law require collision insurance?
Collision coverage isn't legally mandated, but lenders require it for financed and leased vehicles. Once you own your car outright, collision coverage becomes optional. But according to the Insurance Information Institute, 77% of drivers maintain collision coverage.
What does collision insurance not cover?
Collision coverage doesn't cover medical expenses, damage to other vehicles, theft, vandalism or mechanical breakdowns. You need liability, comprehensive and personal injury protection coverage for complete financial protection.
Should I file a collision claim for minor damage?
Compare repair costs to your deductible before filing. If repairs cost $700 and your deductible is $500, you pay $500 either way and risk a rate increase that could cost more than the $200 payout. For minor damage at or below your deductible, paying out of pocket usually makes more financial sense.
Does collision insurance cover a rental car?
Collision coverage on your personal policy may extend to rental cars, but coverage varies by insurer and policy. Check your policy before declining the rental company's collision damage waiver. If you don't have collision coverage on your own car, you won't have it on a rental either.
What happens if my car is totaled?
If repair costs exceed your car's actual cash value, your insurer declares it a total loss and pays you the ACV minus your deductible. If you owe more on your loan than the ACV payout, gap insurance covers the difference. Without gap coverage, you pay that balance out of pocket.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty (P&C) Insurance Producer in Connecticut, is MoneyGeek's resident insurance expert. He has analyzed the insurance market for almost a decade, first with LendingTree and now with MoneyGeek, conducting original research on hundreds of insurance companies and millions of insurance rates for insurance shoppers.
He writes about economics and insurance on MoneyGeek, breaking down complex topics so people can have confidence in their purchase. Like all MoneyGeek analysts, Mark collects and analyzes independent cost and consumer experience data on insurance companies to provide objective recommendations in our content that are independent of any of MoneyGeek's insurance company partnerships.
His insights on products ranging from car, home and renters insurance to health and life insurance have been featured in The Washington Post, The New York Times and NPR, among others.
Mark holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He started his career working in financial risk management at State Street before transitioning to the analysis of the personal insurance market. He's also a five-time Jeopardy champion!
Sources
- Insurance Information Institute. "Facts + Statistics: Auto insurance." Accessed May 4, 2026.
- National Association of Insurance Commissioners. "Auto Insurance Database Average Premium Supplement." Accessed May 4, 2026.
- Texas Department of Insurance. "How can I reduce my monthly premium?." Accessed May 4, 2026.