Collision Insurance

Collision insurance is a type of auto coverage that pays for damage to a vehicle resulting from collisions with other vehicles or stationary objects, such as poles, guardrails, or walls. Unlike liability insurance, which covers damage to others, collision insurance protects the policyholder’s own vehicle.

It applies regardless of who is at fault, though deductibles must be paid before coverage applies. For consumers, collision coverage provides essential financial protection, particularly for newer or high-value vehicles, ensuring that repairs or replacements are affordable after an accident.

For lenders and lessors, requiring collision insurance on financed vehicles ensures that their collateral is safeguarded until the loan or lease is paid off. Premiums are based on vehicle value, driver history, deductible levels, and regional risk factors.

While collision coverage is optional for owners of older cars with lower values, it is often recommended if repair costs could exceed the vehicle’s worth. For insurers, collision policies are among the most frequently used coverages, making them a central part of auto insurance packages.

For consumers, deciding whether to carry collision depends on balancing premium costs with the potential financial burden of paying for repairs out of pocket. Ultimately, collision insurance highlights the importance of risk management in vehicle ownership and financing.