Collision Insurance: Should You Get It & What It Costs

fact checked icon

Updated: May 12, 2026

Advertising & Editorial Disclosure

Key Takeaways
blueCheck icon

Collision coverage pays for your car after an accident you cause or a single-vehicle incident like hitting a tree or guardrail. If another driver hits you and they have insurance, their liability coverage pays for your damage first.

blueCheck icon

If your car is financed or leased, your lender requires collision coverage. If you own your car, it's optional but worth keeping if you can't afford to replace your car out of pocket and want to protect your vehicle.

blueCheck icon

81% of drivers who shop MoneyGeek add collision coverage to their policy for an incremental cost of $62 per month on average. 79% buy both collision and comprehensive coverage together adding $102 per month on average to a liability policy.

What Is Collision Insurance and What Does It Cover?

Collision coverage pays for damage to your car when it hits something while moving. That includes accidents with other cars, hitting a guardrail, running into a tree or flipping your car. You pay your deductible first, then collision covers the rest up to your car's actual cash value.

You collision insurance is not always the first coverage that pays. If another driver hits you and they have insurance, their liability coverage pays for your damage first. Your collision covers your car when you cause the accident. 

  • How is collision different from comprehensive? Collision does not cover theft, weather damage or vandalism. Those fall under comprehensive coverage.
  • How is collision different from liability and PIP? Collision only covers damage to your own car. Liability coverage covers two things: bodily injury liability pays for injuries you cause to others, and property damage liability pays for damage you cause to other vehicles or property. Personal injury protection covers your own medical bills and lost wages after an accident regardless of fault.
  • How is collision different from uninsured motorist coverage? Uninsured motorist coverage specifically covers you and your car when an uninsured or underinsured driver hits you. It is required in some states and in some cases carries a lower deductible than collision. Collision covers the same scenario but applies more broadly since it pays regardless of who caused the accident or whether the other driver has insurance.
You rear-end another car
Yes
Collision covers accidents you cause regardless of the other driver's coverage
Someone with insurance hits you
No
Their liability coverage pays first. Use collision only if you want faster resolution
You swerve and hit a tree
Yes
Collision covers single-vehicle accidents including hitting objects
An uninsured driver hits you
Yes
Collision steps in when the at-fault driver has no insurance. Uninsured motorist coverage may also apply depending on your state and can carry a lower deductible
Your car is stolen
No
Theft is not covered by collision. You need comprehensive coverage for stolen vehicles
Hail damages your car
No
Weather damage is not covered by collision. You need comprehensive coverage for hail, flooding and storm damage

Why You Can Trust Moneygeek

How Much Does Collision Coverage Cost?

Collision coverage averages $464 per year ($39 a month) on its own, according to the National Association of Insurance Commissioners. Rates range from $313 per year in Iowa to $664 in Washington D.C. Most drivers buy collision with comprehensive coverage as part of a full coverage policy, which averages $137 per month or $1,644 per year according to MoneyGeek's analysis of over 2.4 million quotes.

In our analysis, three factors move collision costs more than anything else:

  1. 1
    Your vehicle

    Your car's year, make, model and trim level all affect your collision rate. A newer vehicle costs more to repair and more to insure. A high-trim model with expensive parts costs more than a base model of the same car. Luxury vehicles and sports cars have the highest collision premiums. In our data, collision premiums on a new luxury sedan can run two to three times the cost of the same coverage on a five-year-old midsize sedan.

  2. 2
    Where you live

    Collision premiums are impacted by local claim rates, traffic data and repair costs. South Dakota drivers pay as little as $307 per year while California drivers pay as much as $607, according to NAIC data. Urban areas within states also cost more. In our analysis, drivers in major metro areas pay $12 to $49 more per month for their collision coverage than drivers in rural areas of the same state for identical coverage.

  3. 3
    Your deductible

    Your deductible is the amount you pay out of pocket when you file a claim. A $500 deductible is the most common choice. Raising it to $1,000 cuts your collision premium by up to 20% nationally, according to our rate data. The trade-off: you pay more out of pocket after an accident. Only raise your deductible to an amount you could pay comfortably today.

mglogo icon
MONEYGEEK EXPERT TIP: FILING A COLLISION CLAIM

Don't file a collision claim if the repair cost is close to your deductible. A $700 repair with a $500 deductible saves you $200 but will trigger a rate increase that costs more than that over the next three years. Pay small repairs out of pocket.

Do You Need Collision Coverage?

You don't want to pay for coverage you don't need. 81% of drivers who shop MoneyGeek buy collision because they want protection if their car is damaged in an accident. Here is how to decide if it makes sense for your situation.

You need it if:

  • Your car is financed or leased. Your lender requires it for the life of the loan.
  • You can't afford to repair or replace your car out of pocket after an accident.
  • Your car is newer or worth more than $8,000. Add your annual collision premium to your deductible and compare that total to your car's value. If your car is worth significantly more, the coverage pays for itself.
  • You drive frequently or in high-traffic areas where accidents are more likely.

You can skip it if:

  • You own your car outright and your annual collision premium plus your deductible is close to your car's current value. At that point the coverage is unlikely to pay for itself. Check your car's value at each renewal using Kelley Blue Book. See our guide on when to drop collision coverage for more detail.
  • You have enough savings to repair or replace your car without a payout.

Does state law require collision insurance? Collision coverage isn't legally required by any state, but lenders require it for financed and leased vehicles.

One thing most drivers miss: dropping collision does not mean dropping liability limits. Your liability coverage should still reflect your asset level regardless of your car's value. See our guide on how much car insurance you need for the right liability limits by asset level.

Image showing a decision tree whether you should get collision coverage.

Bottom Line

Collision coverage pays for your car after an accident you cause or a single-vehicle incident. 81% of drivers who shop MoneyGeek carry it. If your car is financed or leased, it's required. If you own your car outright, keep it if you can't afford to replace your car out of pocket and drop it when annual premiums plus your deductible approach your car's current value.

Most drivers buy collision alongside comprehensive coverage as part of a full coverage policy. Get quotes from at least three insurers to find the right balance of price and coverage for your situation.

Auto Collision Insurance: FAQ

Can I have collision coverage without liability coverage?
Does collision coverage transfer if I buy a new car?
Does collision insurance cover a rental car?
What happens if my car is totaled?

About Mark Fitzpatrick

Mark Fitzpatrick, Licensed P&C Insurance Expert, MoneyGeek

Mark Fitzpatrick, a Licensed Property and Casualty (P&C) Insurance Producer in Connecticut, is MoneyGeek's resident insurance expert. He has spent nearly a decade analyzing the market, first at LendingTree and now at MoneyGeek, where he produces original research on hundreds of carriers and millions of rates across auto, home, renters, health and life insurance.

He covers economics and insurance at MoneyGeek, and his work has been featured in The Washington Post, The New York Times and NPR, among other outlets.

Like all MoneyGeek analysts, he draws on independent cost and consumer experience data. No insurance company partnership influences his recommendations.

Fitzpatrick earned his degrees from Johns Hopkins University (M.A. Economics and International Relations) and Boston College (B.A.). His career began in financial risk management at State Street. He's also a five-time “Jeopardy!” champion.

Read Full Bio »
Sources