What Is Collision Coverage?
When an accident happens, one of the first questions many drivers have is whether their insurance will help pay for repairs. That’s where collision coverage comes in. Understanding what collision coverage is and how it works can make a big difference in how quickly you get back on the road. At Re-Lux Collision, we’ve helped countless customers navigate insurance claims after a crash, so we know just how valuable this type of protection can be. In this guide, we’ll break down what collision insurance cover includes, how it compares to other car insurance coverages, what affects your premium, and how to decide if purchasing collision coverage makes sense for you.
Collision coverage is a type of auto insurance that helps pay to repair or replace your vehicle if it’s damaged in an accident involving another vehicle or an object. This coverage helps pay whether you were at fault or not, and it applies to incidents like hitting a tree, a telephone pole, or a fence. It’s designed to protect your own vehicle, ensuring that you’re not left with the full repair bill after an unexpected crash.
Collision coverage helps pay for damage that results from direct impact. For example, if you rear end another car, slide into a guardrail, or experience a rollover accident, your collision insurance coverage will step in to cover the cost of repairs up to the actual cash value of your car, minus your collision deductible.
Many drivers ask, “What is collision coverage compared to comprehensive insurance?” The answer is simple. Comprehensive coverage pays for non-collision events like theft, hail, hitting an animal, or damage from a falling tree. Collision insurance focuses on damage from impact events while comprehensive insurance covers damage caused by external forces that don’t involve a crash.
What Does Collision Coverage Include?
Common Examples of What’s Covered
Your collision coverage helps pay for repair or replacement in situations like:
- A car accident involving another vehicle
- A single-car crash where you hit a stationary object such as a pole, wall, or fence
- A rollover accident where your car flips over
- Damage from hitting a curb or deep pothole
For example, if you’re involved in a fender bender in a parking lot or accidentally back into a telephone pole, the damage to your own car would be covered by collision insurance. The insurance company will pay for the cost to repair or replace your vehicle, minus your deductible.
What’s Not Covered by Collision Insurance
Collision insurance doesn’t cover everything. If your car is damaged by theft, vandalism, hail, or hitting an animal, that would fall under comprehensive coverage instead. Collision insurance also doesn’t cover normal wear and tear, maintenance issues, or mechanical failures. It focuses specifically on accidents involving impact.
If you hit a deer, for example, that would not be covered by collision coverage. Instead, comprehensive coverage would apply. The same goes for storm damage or a tree branch falling on your car. Collision coverage is meant for direct crashes, while comprehensive coverage takes care of outside elements.
Is Collision Coverage Required?
Collision coverage is not required by state law, but it is often required by your lender or leasing company if you finance or lease your vehicle. Lenders require collision insurance to protect their investment until the loan is paid off. Once you own your car outright, you can choose whether to keep it.
Even though it’s optional, collision coverage can be a wise choice. Accidents can happen to anyone, and the value of your car may make repairs costly without coverage. Purchasing collision coverage gives you peace of mind that you can afford to repair your vehicle after a crash, even if you were responsible for the accident.
How Collision Coverage Works After an Accident
When you’re involved in an accident, your insurance company will guide you through the claim process.
- You file a claim describing what happened and provide photos or details about the vehicle damage.
- You pay your collision deductible amount, which is the out-of-pocket portion you agreed to when you purchased your policy.
- The insurer pays to repair or replace your vehicle up to its actual cash value, minus the deductible.
Example of a Claim
Let’s say your vehicle is involved in a rear end collision, and the total cost to repair your car is $5,000. If your collision deductible is $500, your insurance company will pay $4,500, and you’ll pay the remaining $500. That’s how collision coverage helps pay for repairs without leaving you responsible for the full amount.
Your insurer may also decide your car is totaled if the cost of repairs exceeds its actual cash value. In that case, they’ll issue payment based on the market value of your vehicle before the accident.
How Much Does Collision Coverage Cost?
The cost of collision insurance depends on several factors, including your car’s make and model, the value of your car, your driving record, where you live, and your deductible choice. A higher deductible will usually lower your premium, while a lower deductible increases your premium but reduces your out-of-pocket cost during a claim.
In 2025, collision insurance premiums continue to rise due to the growing cost of repairing advanced vehicle technology and safety systems. Many modern cars require specialized tools and calibration after even minor collisions, which increases both repair cost and coverage rates. However, having collision insurance coverage ensures you can restore your vehicle properly without cutting corners on safety.
When you purchase collision insurance, you can typically choose a collision deductible between $250 and $1,000. A higher deductible will lower your monthly payment, but you need to be confident that you can afford to pay that amount if an accident happens. Balancing cost and financial comfort is key when purchasing collision coverage.
When to Drop or Buy Collision Coverage
If your vehicle is older or has depreciated significantly, you may wonder if it’s still worth it to buy collision coverage. A good rule of thumb is to compare your car’s actual cash value with your annual premium and deductible. If the combined cost of your premium and deductible is higher than the cash value of your car, keeping collision insurance might not make financial sense.
However, if your car is newer, financed, or leased, maintaining collision insurance coverage is strongly recommended. A lender or leasing company will require it to protect their asset. For those financing a car, you might also consider gap insurance, which helps pay the difference between what you owe and what the insurer pays if your vehicle is totaled.
Drivers with older vehicles can sometimes drop collision coverage to save money, but only if they’re comfortable covering repairs out of pocket. Always assess the potential risk before you decide to buy collision coverage or cancel it.
Collision vs. Comprehensive Coverage
While both types of coverage protect your vehicle, they apply in different situations. Collision coverage helps pay when your car hits another vehicle or object, while comprehensive coverage helps pay for non-collision events like theft, vandalism, or natural disasters. Many drivers choose to carry both for full protection.
For example, if you crash into a fence or back into a pole, that’s covered by collision insurance. If your car is stolen, damaged by hail, or you hit an animal on the road, comprehensive insurance applies. Together, these coverages ensure you’re protected from almost any unexpected event that could damage your car.
Common Myths About Collision Coverage
“Collision coverage pays for every type of damage.” False. Collision coverage only applies to impact-related incidents.
“I don’t need it if I’m a careful driver.” Accidents happen even when you’re not at fault, like being rear ended at a stoplight.
“It’s only worth it for new cars.” Not true. The decision depends on the value of your car and how much financial risk you’re willing to take.
“I can’t afford it.” Many drivers are surprised to find that a higher deductible can make premiums more affordable without sacrificing protection.
Understanding these myths helps drivers make confident decisions about their auto insurance and avoid costly gaps in protection.
Choosing the Right Collision Deductible
Your collision deductible is the amount you agree to pay out of pocket before your insurance company covers the rest of the repair or replacement cost. Choosing the right deductible is a balance between affordability and financial readiness.
If you choose a lower deductible, your premium will be higher each month, but your out-of-pocket cost after an accident will be smaller. A higher deductible lowers your premium, but you’ll need to make sure you can afford that amount if a crash happens.
For example, if your collision deductible is $1,000 and your car suffers $4,000 in damage, you’ll pay the first $1,000, and the insurance company will cover the remaining $3,000.
Working With a Certified Collision Repair Shop
After a collision, you have the right to choose where your car is repaired. It’s important to select a certified collision repair shop that follows manufacturer standards and uses quality materials. At Re-Lux Collision, we specialize in advanced frame and paint repair to restore your vehicle safely and accurately.
We also work directly with your insurance company to streamline the claim process and ensure the repairs are covered correctly. Whether your vehicle needs structural alignment, paint refinishing, or safety system recalibration, our certified technicians handle everything with precision and care.
Properly repairing your car after a collision protects its resale value and ensures it remains safe to drive. Always choose a shop that stands behind its work with a guarantee, so you can drive away with confidence.
FAQs About Collision Coverage
Does collision coverage pay if I’m at fault?
Yes, collision insurance helps pay for repairs to your own vehicle even if you caused the accident, minus your deductible.
Does it cover a rental car?
Collision coverage may not automatically include rental reimbursement, but you can add it to your policy for extra protection.
Can I use any repair shop?
Yes, you can choose any certified shop you trust. Insurers may suggest preferred providers, but the decision is always yours.
Is collision insurance worth it for an older car?
It depends on your car’s value compared to the premium and deductible. If the cost of coverage outweighs the actual cash value of your car, it might be time to drop it.
Does collision coverage apply to hit-and-run incidents?
Sometimes, yes. If another driver hits your car and leaves the scene, collision insurance may cover the damage depending on your policy.
Conclusion
Collision coverage is one of the most important parts of a car insurance policy because it helps pay for repairs or replacement when your vehicle is damaged in a crash. It’s not required by law, but it’s essential for drivers who want to protect the value of their car and avoid paying large repair bills out of pocket.
Whether you’re considering buying collision insurance for the first time or reviewing your current policy, understanding how it works can help you make smarter financial decisions. From choosing the right collision deductible to comparing it with comprehensive coverage, knowing your options means being prepared when accidents happen.
At Re-Lux Collision, we see every day how collision coverage helps drivers recover faster after an accident. We handle everything from insurance coordination to precision repairs, making the process as easy as possible. If your vehicle has been damaged in a collision, our certified team is ready to help you repair or replace your vehicle and restore its original condition. Call our team today or request your free estimate to get started.
