Collision coverage is one of three options that, along with Comprehensive coverage and Fire and Theft with Combined Additional Coverage (CAC), makes up Physical Damage insurance.
Collision insurance provides protection for your vehicle in case it is damaged in a collision. Collision insurance pays to repair or replace your vehicle if it:
- Collides with another object
- Overturns or rolls
Who needs collision coverage?
If you want to protect your vehicle from collisions with other vehicles or objects, you should choose Collision insurance. Collision coverage pays for damage to your vehicle — including if it is totaled — in case of a collision.
Collision coverage is always sold with either Comprehensive insurance, which protects your vehicle in non-collision incidents, such as theft or vandalism, or Fire and Theft with CAC, which is a more limited form of Comprehensive insurance designed for specific heavy truck types.
If your vehicle is leased, then you probably are required to have Collision insurance. If your vehicle is fully paid for, Collision coverage is optional.
Collision insurance deductibles and other details
For Collision insurance, you must pick a deductible, which is the amount that you agree to pay out of pocket when you have a claim.
Choosing a higher deductible is an easy way to lower the price of your insurance. Be sure you choose a deductible that you can afford to pay out of pocket at any time.
When you select Collision insurance, you are also required to submit a Stated Amount, which is your best estimate of the current value of your vehicle. The Stated Amount should take the age and condition of your vehicle into account, as well as any permanently attached equipment.
Collision insurance examples
You're driving down the street and rear-end the car in front of you.
Your Liability insurance will pay for the damage to the other person's car, and your Collision insurance will pay for damage to your own vehicle because this was an accident in which you collided with another vehicle.
If you selected a $500 deductible, you would pay the first $500 out of pocket to have your vehicle repaired or replaced, depending on the extent of the damage.
Collision coverage exceptions and restrictions
You must have Comprehensive insurance or Fire and Theft with CAC in order to select Collision insurance.
You can purchase a Physical Damage Only policy, which would include two insurance coverages only:
- Collision insurance
- Either Comprehensive insurance or Fire and Theft with CAC
Collision insurance cannot be applied to non-owned trailers, such as those used as part of a Trailer Interchange Agreement. Collision coverage for non-owned trailers can be purchased separately as part of Trailer Interchange insurance.
Collision insurance state-specific details
Each state has its own regulations regarding insurance coverages. Some coverages may not be purchased in conjunction with Collision insurance. Your agent or representative will inform you of any state-specific details when you purchase your policy.