Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Full Bio →

Written by

Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate drivers about...

Full Bio →

Reviewed by Laura Walker
Licensed Agent for 10 Years

UPDATED: Apr 8, 2019

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance-related. We update our site regularly, and all content is reviewed by auto insurance experts.

Collision coverage is optional auto insurance coverage which protects you in the event that damage occurs to your car from an accident where you were at fault.

There are many good reasons for having collision insurance, despite the additional costs, and drivers should carefully weigh the alternatives when choosing whether or not to purchase this coverage.

Use our FREE quote tool to compare auto insurance rates today!

How much is auto insurance per month?

Collision Coverage is Optional

Collision coverage is offered as optional (or supplemental auto insurance) in addition to your normal state required liability coverage. Many drivers purchase different types of coverage including both comprehensive and collision coverage for a well round auto insurance policy.

How much is Collision Coverage?

The cost of any auto insurance will depend on a number of factors including your driving record, the type of vehicle insurance, where you live and more. Collision coverage is not cheap but it certainly provides a wealth of protection in a car accident.

For most drivers the cost of adding collision coverage to an auto insurance plan is around 20-30% of a full-coverage policy premium.

Should you buy Collision Coverage Insurance?

Whether you choose to insure your vehicle with collision coverage will depend on several factors. Analyzing these factors, and the inherent risks involved with each, will help you make an informed decision about purchasing collision coverage.

Financed Vehicles

If your vehicle is financed you may not have a choice about whether or not there is an option to buy collision insurance. Most financing entities require “full coverage” for as long as your vehicle is financed, in order to protect the company’s investment in your vehicle.

If you are required to have “full coverage” on your car, you will need liability, collision, and comprehensive policies, and often uninsured motorist coverage, as well.

FREE Auto Insurance Comparison

Compare quotes from the top auto insurance companies and save!

 Secured with SHA-256 Encryption

Vehicles not Financed or Leased

However, if your vehicle is not financed, you have a choice of whether to purchase collision coverage. Your decision will depend on the age and condition of your vehicle, your driving record, and the amount of available cash you have to pay for repairs.

Whether you need collision coverage then depends on the condition and age of your vehicle. Many people choose to save money by raising their insurance deductibles, particularly on collision policies.

If you have significantly raised your deductible, and you damage your own car, you will have to pay a significant amount before the insurance company will pay any money. Further, if your car is older, the company will value it according to “book value,” and this may be very little by the time you meet your deductible.

As an example, if your car is worth $1500, and your collision deductible is $1000, your insurance company is only responsible for $500 in damages, no matter how much it takes to fix your car.

If you own a newer car worth a significant amount, it is probably a good idea to carry collision coverage with a modest deductible. This will ensure that your car will be repaired and put into the condition it was prior to the wreck with a minimum outlay of cash on your part.

On the other hand, if your car is not worth much, you may decide, especially if it was a single-car accident, that it would not be financially profitable to file against your insurance if your car is damaged, as this will increase your insurance rates for a very small amount of payout.

There are no hard and fast rules about how much a car should be worth before you take out collision insurance, but generally speaking, if you do not have the cash available to fix your car yourself, collision is a wise investment, especially if you depend on your vehicle for transportation and do not have access to another car.

How does collision coverage work?

If you have liability coverage, you do not need to worry about fixing your vehicle in the event that another person causes the accident, unless that person does not have insurance coverage. If the at-fault driver is uninsured, you will need uninsured motorist coverage to pay for the damage.

If you have uninsured motorists coverage and liability insurance, the other insurance company or your uninsured motorist policy will be responsible for the damages to your vehicle.

On the other hand, if a car accident was your fault, your liability insurance will pay for damage to the other person’s vehicle, but will not pay to fix your car. This is because liability insurance is only designed to protect you from the results of damages you cause to another person, not to pay for your personal losses.

Because of this, your car will only be paid for if you have collision insurance.

Use our FREE quote tool to compare auto insurance rates today!

Related posts:

  1. What is pet injury coverage as part of an auto insurance policy?
  2. What is full coverage car insurance?
  3. Does full coverage car insurance cover engine damage?
  4. What is the difference between comprehensive and collision auto insurance?
  5. Will my auto insurance coverage pay for a cracked rim?