Collision Coverage

What Is Collision Coverage?

Collision insurance coverage is exactly what it sounds like! Collision insurance pays to repair or replace your vehicle if it's damaged in a collision, regardless of who is at fault.

Collision Coverage is not required by law and is not part of liability-only car insurance. However, if your car is leased or financed, your lender might require you to add Collision Coverage to your car insurance policy.

Meet Joe, and see how Collision Coverage came in handy when he rear-ended a light post at the grocery store.

Do I Need Collision Coverage?

Maybe. There are a few reasons you might want to consider including Collision Coverage on your policy, even though it's not required by law.

You may want to purchase Collision Coverage if:

  • You're leasing or financing your car. Your contract or lien holder will likely require you to carry both Collision and Comprehensive Coverage.
  • You're worried about paying for damage to your vehicle if you run into or are hit by something or someone, or if your car overturns.
  • You might not be able to buy another car if your current one is totaled.

If your car is 8 years old or older, you may want to rethink buying Collision Coverage. The harsh truth is that older cars generally don’t retain their value. And, because Comprehensive and Collision Coverages are usually limited to the actual cash value (ACV) of your car, you need to evaluate whether the cost of including that coverage on your policy is worth it to you. A Direct Auto Insurance agent can help you make the best choice for your situation.

What is Collision Insurance? Infographic explaining what collision covers as part of car insurance.

What Does Collision Insurance Cover?

Collision Coverage will pay for your vehicle to be repaired or replaced if:

  • Your car hits another car or motorcycle
  • Your car collides with a stationary object, like a tree, fence or guardrail
  • Your car flips over in an accident
  • Your car is hit by a "hit and run" driver

Collision Coverage does not cover:

  • Any medical expenses
  • Damage to the other driver's car
  • Weather-related damage to your car

What Is a Collision Deductible?

If your vehicle is damaged in an accident, Collision Insurance Coverage will pay for it to be repaired or replaced—minus your deductible. What's a Collision deductible? A Collision deductible is a set amount of money you pay out-of-pocket, up front for the damages to your car. The rest of the expenses are paid for by your insurance company, up to your car's actual cash value. Your ACV takes into account the price of your car when you purchased it, as well as the age and condition it’s in at the time of the accident.

More on Collision Insurance Coverage

Still wondering if you need Collision insurance? Let's talk. Friendly agents are standing by to answer your questions. Call 1-877-GO-DIRECT (1-877-463-4732) or visit a Direct Auto Insurance location near you today.

The information provided herein is designed to give helpful advice on the topic discussed. It is not intended to provide legal or any other type of advice and is not meant to be a thorough discussion of every issue that a person should consider or may encounter. We are not responsible or liable for the availability of links to websites or resources, or for any content, advertising, products, services or other materials on or available through these websites or resources or your reliance thereon. Any references to third party rates or products are subject to change without notice. Insurance coverages are subject to policy terms and conditions.