What Is Collision Insurance? 

Imagine this: you’re driving down the road when suddenly, an accident happens. The damage to your vehicle could be expensive to fix. Collision insurance is designed to help cover repairs or replacement after a covered accident. But what exactly is collision insurance, and how do you know if it’s right for you? In this blog, we’ll explain how collision insurance works, what it covers, and when it may be worth having. 

Understanding Collision Insurance Coverage 

Collision insurance covers damage to your vehicle from incidents such as: 

• Collisions with another vehicle. 

• Single-vehicle accidents, like hitting a guardrail or a telephone pole. 

• Damage caused by hitting potholes. 

• Rollover accidents where your vehicle flips over. 

• Hit-and-run incidents where the other driver is unknown but your vehicle is damaged. 

This coverage generally pays up to the actual cash value (ACV) of your vehicle minus your collision deductible amount. Choosing a lower deductible usually means higher premiums, while a higher deductible may lower your premium but increases out-of-pocket costs if you file a claim. 

Real-World Claim Examples 

• A driver hits a large pothole, causing suspension damage. Collision coverage may help pay for repairs. 

• Your car rolls over during a sharp turn, and collision insurance may cover the repair or replacement. 

• You accidentally back into a tree in your driveway; collision coverage may help with the damage. 

• A hit-and-run driver damages your vehicle in a parking lot; collision coverage may help cover repair costs. 

What Collision Insurance Does Not Cover 

Collision insurance specifically covers damage from collisions but does not typically cover other types of losses, including: 

• Theft or vandalism of your vehicle. 

• Damage from weather events like hail, flooding, or windstorms. 

• Mechanical failures or breakdowns unrelated to an accident. 

• Damage to another person’s vehicle or property (this is covered under liability auto insurance). 

For these types of incidents, comprehensive insurance or another applicable coverage may apply. 

Collision vs. Comprehensive vs. Liability Insurance 

Understanding the differences between these three key coverages can help you choose the right protection: 

Coverage Type	What It Covers	When It Applies	Pays For
Collision Insurance	Damage to your vehicle from covered collisions with vehicles or objects	After a covered crash or accident involving your vehicle	Repairs or replacement of your vehicle, subject to policy terms
Comprehensive Insurance	Covered damage from non-collision events like theft, vandalism, weather, fire, or hitting animals	Covered non-collision incidents like storms or theft	Repairs or replacement of your vehicle, subject to policy terms
Liability Coverage	Covered injuries and property damage to others if you are at fault	When you cause a covered accident affecting others	Covered medical expenses and property damage, subject to policy limits

How Deductibles Work in Collision Coverage 

A collision deductible is the amount you pay out of pocket before your insurer covers its portion of a covered claim. For example: 

• If your deductible is $500 and covered car repairs cost $2,000, you pay $500 and the insurer may pay the remaining $1,500. 

• Choosing a lower deductible means you pay less after a covered accident but usually pay higher premiums. 

• A higher deductible may lower your premiums but increases your out-of-pocket responsibility during a claim. 

Balancing deductible amounts with premium costs can help you manage your overall insurance expenses. 

How Insurers Decide to Repair or Total Your Vehicle 

After a collision, your insurer assesses whether to repair your vehicle or declare it a total loss. This decision can depend on: 

• The cost of repairs compared with the vehicle’s actual cash value (ACV). 

• Applicable state requirements and the insurer’s total-loss guidelines. 

If your vehicle is totaled, the settlement is generally based on the ACV minus your applicable deductible, subject to your policy terms. This payout may not equal the amount you originally paid for the vehicle or the cost of purchasing a replacement. 

When Is Collision Insurance Worth Keeping? 

Collision coverage is often worth considering if: 

• Your vehicle is newer or has a higher market value. 

• You are financing or leasing your car, as lenders may require it. 

• You cannot afford to pay out of pocket for significant car repairs or replacement. 

However, it might make sense to reconsider collision coverage if: 

• You drive an older vehicle with a low market value. 

• You have a high collision deductible amount compared with your vehicle’s value. 

• Your financial situation allows you to absorb repair or replacement costs without hardship. 

Your independent insurance agent can help evaluate these factors to find coverage options for your needs. 

Filing a Collision Insurance Claim: Practical Guidance 

1. Document the Accident: Take photos of the damage, gather witness information, and file a police report if necessary. 

2. Contact Your Insurance Agent: Notify your insurer promptly and provide relevant details. 

3. Work with the Claims Adjuster: The adjuster will review the vehicle damage and claim. 

4. Choose a Repair Shop: Review your repair options and any applicable insurer requirements. 

5. Pay Your Deductible: You are responsible for your applicable collision deductible. 

6. Receive Repairs or Settlement: Depending on the claim, the insurer may pay for covered repairs or issue a settlement if the vehicle is totaled. 

Making Collision Insurance Affordable 

You may be able to lower your collision insurance premiums by: 

• Choosing a higher deductible. 

• Maintaining a clean driving record. 

• Bundling your auto coverage with other eligible insurance policies like renters or homeowners. 

• Taking advantage of available discounts for safety features or other qualifying discounts. 

Additional Insights on Collision Insurance and Auto Coverage 

Here are the key takeaways to remember when considering collision insurance for your vehicle: 

Why Your Insurance Company Recommends Collision Coverage 

Collision coverage can help protect your vehicle from covered repair or replacement costs after an accident, reducing how much you may have to pay out of pocket. 

Purchasing Collision Coverage: What to Consider 

When buying collision coverage, think about your vehicle’s age, condition, value, and any lender requirements. While collision coverage generally isn’t required by state law, lenders or leasing companies may require it. Getting an auto insurance quote can help you compare your options. 

Lower Premiums and Smart Choices 

You may be able to reduce premiums by selecting a higher deductible, bundling eligible policies, maintaining a clean driving record, and asking about available discounts. 

Understanding Fender Benders and Collision Claims 

Even minor accidents can result in vehicle damage. Collision insurance may help cover eligible repair costs, subject to your deductible and policy terms. 

State Requirements and Responsibility 

Collision insurance generally isn’t required by state law, but lenders or leasing companies may require it for financed or leased vehicles. The coverage helps pay for covered damage to your own vehicle after a collision. 

Ready to Protect Your Vehicle? 

Collision insurance can help protect you from the cost of covered vehicle damage after an accident. Contact Acceptance Insurance today to get a personalized quote and explore coverage that fits your needs and budget. 

You can quote your auto insurance online, visit a nearby office, or call 877-405-7102. Our local agents can help you navigate your options and find coverage that works for you. 

Frequently Asked Questions 

Is collision insurance required? 

Collision insurance generally isn’t required by state law, but lenders or leasing companies may require it if you finance or lease your vehicle. 

Is collision insurance worth it for an older car? 

Whether collision insurance is worth it for an older car depends on the vehicle’s value, cost of coverage, deductible, and your financial situation. 

Does collision insurance cover hitting a deer? 

Collision insurance typically does not cover hitting a deer. This type of incident is generally handled under comprehensive insurance, subject to your policy terms. 

Does collision insurance cover pothole damage? 

Damage caused by hitting a pothole may be covered under collision insurance, subject to your deductible and policy terms. 

Can you have comprehensive insurance without collision? 

Depending on the insurer, it may be possible to have comprehensive insurance without collision coverage, though lenders or leasing companies may require both for financed or leased vehicles.