Insurance Car Insurance Car Insurance Basics What Is Collision Coverage? Collision coverage explained in less than four minutes By Emily Delbridge Emily Delbridge Twitter Emily Delbridge is an authority on car insurance and loans who contributed to The Balance for nine years. Delbridge is a licensed Personal Lines Insurance Agent who has been in the insurance business since 2005. Since joining the industry, she has significantly contributed to the book of business for independent agency, Great Michigan Insurance. learn about our editorial policies Updated on May 19, 2022 Reviewed by Samantha Silberstein Reviewed by Samantha Silberstein Twitter Samantha Silberstein is a Certified Financial Planner, FINRA Series 7 and 63 licensed holder, State of California Life, Accident, and Health Insurance Licensed Agent, and CFA. She spends her days working with hundreds of employees from non-profit and higher education organizations on their personal financial plans. learn about our financial review board In This Article View All In This Article What Is Collision Coverage? How Collision Coverage Works What Types of Events Are Covered? Types of Collision Coverage Photo: FG Trade / Getty Images Definition Collision insurance coverage pays to repair damages or refunds you for the cash value of your vehicle if it is totaled when you collide with something while driving. What Is Collision Coverage? Collision coverage insures the costs for repairs or your car only, not for any other cars or drivers. In most states, it only applies when you are at fault in an accident or if your car suffered damage and you do not know who or what caused the accident. For the purpose of filing a claim, your car insurance policy must define a "collision" very clearly. Your car must hit either with another car or it must come into contact with an inanimate object, such as a fence, guard rail, pothole, or pole. How Collision Coverage Works Most states have laws that require all drivers to have some degree of insurance coverage if they plan to drive a vehicle in the state, often to cover bodily harm and liability for property damage. Collision coverage is not always part of these basic mandates though. You may choose to add collision coverage onto your current car insurance policy whether or not your state demands it. This could pay off in the long run, since repairs to your car after a crash could be massive. A crash becomes even more costly if you are renting or leasing a car. On average collision coverage will cost you an extra $290 per year. Note No matter what state you live in, if you're still making payments on your car you may need to protect it. If you took out a loan in order to buy your car, your lender may demand that you purchase collision coverage so their asset is covered should something happen to damage it. What Types of Events Are Covered? There are many cases that count as "collisions" that fall under this type of policy: Car Crashes If your vehicle crashes into another car (whether you hit a car or the other driver hits you), you are in a collision. Collision coverage will apply to at least one of the cars involved. If the at-fault driver did not select collision coverage, they will have to pay for their own repairs for their vehicle. Potholes Although running over a pothole might be easy to avoid, if this happens to you and your car suffers damage, the odds are in your favor that repairs will be covered. Insurers treat pothole damage as a collision. Again, this type of coverage must be selected in your main car insurance policy for repairs to the vehicle to be covered. Trees Funny enough, it matters whether you hit the tree or the tree hit you. A falling tree is part of a comprehensive claim. Hitting a standing tree or even a tree which fell prior to you hitting it is filed as a collision. Guard Rails To put it simply, hitting any static object is defined as a collision. Slamming into or even just lightly scraping a guard rail, stop sign, mailbox, or building would all count. It does not matter if the damage is a small scratch or a crushing blow. The bottom line is that contact with an object that is not alive and not in motion and results in damage to your vehicle is a collision. Trenches and Ditches If you've ever been on icy roads and slid into a ditch, or had to swerve to avoid hitting a bump in the road and landed in a trench, you'll know that a ditch or trench can cause major damage to your vehicle. Earth shoved up into the undercarriage of your car can clog any number of functions, and chances are you'll need a trip to a mechanic. Rolled vehicles are even more at risk for damage. Physical damage all over the car (so long as it's not from a type of peril that is covered elsewhere) will always be covered under the collision portion of your policy. Types of Collision Coverage Is it a repair or total loss? If you have collision coverage, your insurer has two options for making you whole again. Either your vehicle will be fully repaired, or the cash value of your car will be paid out in the case of a total loss. Here's what to expect: What to Expect If Your Car Can Be Repaired In most cases, aftermarket parts or used parts will be used to repair your vehicle because they are cheaper. If you prefer original parts for your make and model from the manufacturer (OEM parts), you will have had to select an extra rider to your policy when you first signed up. Some insurers offer this option and some do not, so if the source of the parts matter to you, be sure to ask about OEM parts and terms when you sign up. The repairs to your vehicle should return your vehicle to the state it was in before the event, as if the damage never happened. This sets the standard for what you should expect from the repairs covered by your insurance company. Any recent repairs or parts that you have had replaced can help to increase the cash value of your car. Find receipts for any recent car repairs you have had done to help ease this process, and get a better payout. Note Collision coverage most often comes with a deductible. You will need to pay this dollar amount out of pocket before the insurance kicks in to cover the rest of the cost of repairs. The deductible is set up at the time you add your vehicle to your car insurance policy, and will be listed in your contract. What to Expect If Your Car Is a Total Loss If your vehicle is a total loss, an insurance claim adjuster will work with you to figure out what the real cash value of your car was at the time of loss. This won't be the same amount you paid for the car, because time has passed and wear and tear will factor in to the new value. Current market value for your car at the time the damage happened may also be a factor. Does It Matter Which Driver Is at Fault? It may not always be clear who is at fault in the case of a crash. It can happen that both parties involved insist they were not at fault. If this happens to you, you can file a claim under your collision coverage and have your insurer work on subrogating for you. Subrogation means you try to get reimbursed for a claim after fault is determined. It allows you to get your vehicle fixed right after the event. It also allows you to get reimbursed right after the repair, without having to wait for an agent to figure out who was at fault. Then down the road if the claim goes in your favor and you are reimbursed, this can wash away your at-fault claim status. There is no law stating that your insurance company needs to help subrogate a claim for you. But many codes of ethics do require it. You may want to talk to your agent about how they treat pay-outs when fault is still in question. No matter what state you live in, if you are at fault in a crash (meaning you are the driver who caused it), you must have collision coverage selected on your car insurance policy to be paid for either repair of damage to your vehicle or the full cash value of your car in case of a total loss. Key Takeaways Collision coverage insures against the cost to repair or replace your car when it strikes a vehicle or object.Drivers must elect collision coverage be part of their policy, as it is not the default or mandate.Unless you opt for an extra rider that pays for original manufacturer parts, your car will be repaired with used or aftermarket parts.States differ in how they treat issues of driver fault, and also the level of coverage needed to drive in the state. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. National Association of Insurance Commissioners. "A Shopping Tool for Automobile Insurance," Page 4. Accessed Sept. 1, 2021. Insurance Information Institute. "What Is Covered By Collision and Comprehensive Auto Insurance?" Accessed Sept. 1, 2021. Insurance Information Institute. "FAQs About Direct Repair Programs and Generic Auto Parts." Accessed Sept. 1, 2021.