Collision insurance is an optional coverage that pays for damages to your vehicle in a collision with an object, such as another vehicle, a tree, or a road sign.^[1] However, collision insurance doesn’t cover certain damages.

Knowing what collision insurance does and doesn’t cover can help you understand whether you need this optional insurance coverage.

What does collision insurance cover?

Car insurance essentially refers to two categories of coverage: liability and property damage. While most states mandate minimum liability coverage, they don’t require collision insurance. Collision insurance is a type of property damage insurance designed to protect your vehicle and finances when your car is damaged.^[2]

However, collision insurance only includes certain forms of property damage. Most of these are a result of your vehicle colliding with an object. Comprehensive coverage, however, is a separate optional coverage that pays for damages from theft, flooding, weather, fire, vandalism, and other non-collision sources.^[3]

Collision insurance coverage limits and examples may vary, depending on the insurer, but many policies tend to cover:

• Driving over a pothole

• Running into a telephone pole, tree, or sign

• Colliding with another car

• The vehicle flipping or rolling over, even if no other cars are involved

What’s not covered?

Collision insurance doesn’t cover all types of damages, even though many incidents may cause similar damage to your vehicle. For example, collision insurance doesn’t cover cracked, pitted, or damaged windshields. That type of damage is covered under most comprehensive insurance policies.

Other situations where collision insurance typically won’t cover damages include:

Is collision insurance worth it?

Since it’s an optional insurance product, some drivers may wonder if collision insurance is worth the expense. This is especially the case for drivers who want to pay the lowest premiums possible.

Collision insurance may be worth the expense if you live in an area with high traffic volume or if you can’t afford the out-of-pocket expense for your vehicle repairs after a covered event.

However, collision insurance may not be worth the expense if you’re insuring an older vehicle. Car values decrease over time, which means that the cost to repair your vehicle may exceed the vehicle’s actual cash value. In this situation, some vehicle owners may believe that collision insurance isn’t worth its monthly expense or maximum reimbursement potential.^[2] Compare the cost of collision insurance and its deductible to your car’s actual cash value to determine if collision insurance is worth it for you.

Pros and cons of collision insurance

Learn More: No-Deductible Car Insurance: Is It Right for You?

Do I need collision insurance?

While it isn’t legally required to carry collision insurance, many drivers do. In fact, a majority of drivers carry this optional coverage in the United States.^[4] You may consider collision insurance if you’re unable to pay for vehicle damages out of pocket, if a young or inexperienced driver is on your policy, or if you want peace of mind in the event of a collision.

Is collision insurance required by law?

No laws require a policyholder to have collision insurance. Most states only mandate either a minimum amount of liability insurance coverage or proof of sufficient assets to pay for damages that the driver may cause when involved in an at-fault accident.^[5]

You may not be required to carry collision or comprehensive coverage, but optional insurance protects you, your vehicle, and your assets in the event of an accident. Accident damages may cost more than the minimum mandated insurance coverage limits.

Comprehensive insurance vs. collision insurance

Comprehensive insurance and collision insurance are similar in various ways. Both are optional insurance coverages that apply to damages to the vehicle. States don’t require drivers to have minimum amounts of these coverages. 

While these coverages aren’t legally required, drivers can purchase them independently and most drivers in the U.S. purchase them both.^[1]

The main differences between comprehensive and collision insurance are the types and extent of damages they cover. Collision insurance covers damages resulting from the driver’s car colliding with an object, like a tree or pothole, as well as if another vehicle collides with the car.

Comprehensive insurance covers damages not related to collisions. This could include damages from riots, vandalism, animals, natural disasters, fires, theft, and falling objects, like branches or projectiles. Comprehensive also covers damage to windshields, while collision doesn’t.

Keep Reading: Does Your Insurance Cover Windshield Replacement?

Collision insurance FAQs