Collision Coverage: Pays to Repair or Replace Your Car After an Accident—No Matter Who’s at Fault
When accidents happen—whether you hit another car or an object—collision coverage steps in to pay for repairs or help replace your vehicle. It's essential protection for those unexpected moments that could otherwise lead to major out-of-pocket expenses and stress.
See Collision Coverage in Action
Real scenarios that show exactly when and how collision coverage protects you.
Parking Lot Fender Bender
Samantha was carefully pulling out of a crowded grocery store parking lot when she accidentally scraped a parked car. Her collision coverage responded immediately, covering the $2,200 repair bill for both vehicles. Instead of paying thousands out-of-pocket, Samantha only paid her $500 deductible and her car was back to normal within a few days.
Rear-End Accident at a Stoplight
Marcus was stopped at a red light when the car behind him slid on icy pavement and crashed into his bumper. Thanks to his collision coverage, the $4,100 in repairs were handled smoothly—his insurer worked directly with the shop, and Marcus only paid his $1,000 deductible. He was back on the road with minimal delay and zero financial surprises.
Major Accident, Car Totaled
After a rainy night, Amanda lost control and collided with a roadside guardrail. Her car was declared a total loss. Collision coverage paid her car’s actual cash value minus a $1,000 deductible, giving Amanda the funds to get a replacement vehicle quickly, instead of leaving her stranded with nothing.
Collision Coverage Explained: The Details That Matter
The complete picture: what's covered, what's not, and how to decide if you need it.
Collision Coverage (Plain English)
Collision coverage pays to repair or replace your car if it’s damaged in a crash—no matter who’s at fault. When you hit another car, a tree, or even a curb, this coverage steps in to cover repairs up to the car’s value. The key thing to understand is that it protects your vehicle, not someone else’s.
Important Details
With collision coverage, you’ll pay a deductible (often $500–$1,500) when you file a claim. The insurance company will pay up to the actual cash value (ACV) of your car if it’s totaled—meaning its current market value, not what you paid or what you owe. If repair costs exceed the car’s value, it’s considered a total loss. Some policies offer options like rental car coverage while your car is being fixed, but this is usually an add-on—ask your advisor.
Collision Coverage vs. Other Coverages
Collision coverage is NOT the same as comprehensive coverage. Collision covers damage from crashes, while comprehensive covers things like theft, hail, and fire. You typically need both to be fully protected from all risks.
Who Needs Collision Coverage?
You typically need this coverage if:
- You are financing or leasing your car
- Your car is newer or holds significant value
You might skip this coverage if:
- Your car is older and the car’s value is very low
Coverage Limits & Options
The maximum payout is your car’s actual cash value (ACV) at the time of the accident. You choose your deductible ($500, $1,000, etc.), which affects both claim payouts and your premium. You can sometimes add extras like rental reimbursement or gap coverage (ask if you owe more than your car’s worth).
What's NOT Covered by Collision Coverage
This coverage does NOT cover:
- Mechanical breakdowns: Repairs for things like a failed transmission or engine
- Normal wear and tear: Standard aging or maintenance issues
- Damage from theft, fire, hail, or vandalism: These are covered by comprehensive insurance
For these situations, you'd need comprehensive or a warranty policy.
Ready to Add Collision Coverage Protection?
Now that you understand collision coverage, see how affordable protection can be with personalized quotes from 26+ carriers.
Your Local Coverage Experts
1,430+ customers trust our expertise to explain coverage clearly and find the right protection for their specific needs.
4.9/5 Stars
Google Reviews from real customers, just like you
97% Retention
Customers stay with us year over year over year
Independent
We work for you, not insurance companies
Local
Fort Collins owned & operated since 1992
From Incident to Resolution: The Collision Coverage Process
Understanding exactly what happens when you file a collision claim – from start to finish.
The Claims Process
- Report the Incident: Notify your insurance company right after the accident—online, by phone, or app. You’ll get a claim number for tracking.
- Damage Assessment: An adjuster will review the damage, usually in person or from photos, then estimate repair costs and eligibility.
- Repair or Settlement: Approved repairs can be made at a trusted shop. Your insurer pays the shop directly (minus your deductible), or if totaled, you receive a settlement for the car’s value minus your deductible.
- Resolution: Once repairs are done or payment is received, your claim is closed. You’re back on the road, protected and supported.
What You Pay
Your deductible - typically $500–$1,500 - is the fixed amount you pay for repairs before insurance kicks in. Your premium covers ongoing protection and claims service. Remember: choosing a higher deductible lowers your monthly premium, but make sure it’s affordable for you during a claim.
Timeline
Simple claims often resolve in one to two weeks, while complex situations—like disputed fault or total loss—may take several weeks or longer. Most customers find the process straightforward and responsive. The key is prompt reporting—the sooner you start the claim, the faster it’s handled.
What Collision Coverage Actually Costs vs. What You Risk
Understanding the real financial impact: what you pay for coverage vs. what you risk without it.
Minor Bumper Repair
Annual Coverage Cost: $300
Scenario: Backing into a pole causes $2,000 in damage.
Without Coverage: $2,000 out-of-pocket
With Coverage: $500 deductible (plus your annual premium)
Protection Value: $1,500 saved in this scenario alone
Moderate Accident – Rear-End Crash
Annual Coverage Cost: $420
Scenario: Collision at a stoplight totals $4,800 in repairs.
Without Coverage: $4,800 out-of-pocket
With Coverage: $1,000 deductible (plus annual premium)
Protection Value: $3,800 saved instantly
Total Loss
Annual Coverage Cost: $490
Scenario: Serious crash totals a car worth $16,000.
Without Coverage: $16,000 out-of-pocket loss, no replacement
With Coverage: $1,000 deductible (plus premium; receives $15,000 for a replacement)
Protection Value: $15,000 saved from financial disaster
The Economic Reality
For most people, collision coverage costs $25–$40 per month—less than a weekly dinner out. One incident without coverage could cost $2,000–$16,000 or more, leading to months or years of financial strain. The math is simple: collision coverage pays for itself with a single claim and protects your savings when the unexpected happens.
4 Costly Collision Coverage Mistakes to Avoid
Learn from others' mistakes—avoid these common errors that can leave you unprotected when you need coverage most.
Dropping Collision Too Soon
Some people remove collision coverage to save money as soon as their car ages. This leaves you vulnerable to expensive repairs or loss if your car is still worth several thousand dollars. Instead, review your car’s value each year and keep coverage until the savings outweigh the risk.
Setting a Deductible Too High
Picking a high deductible lowers your premium, but can you actually pay $1,500 or $2,000 after an accident? If you can’t afford your deductible, you can’t access coverage. Choose a deductible that fits your emergency fund.
Relying on Other Policies
Some believe their basic liability or comprehensive policy pays for all types of car damage. Without collision coverage, damage from a crash is not paid for. Make sure you have both if you want true all-around protection.
Not Updating Coverage After Loan Payoff
After paying off a loan or lease, many forget to reevaluate their coverage. Your needs may change – but if your car still holds value, dropping collision could be costly if an accident happens soon after. Reassess your coverage to match your car’s worth and your risk tolerance.
Find answers to your most pressing insurance questions right here.
Explore Your Coverage Options
Discover the best insurance coverage tailored to your individual needs and protect what matters most.