Introduction: Understanding Collision Car Insurance
Collision car insurance in 2025 is a must due to the increasing volume of daily automobile traffic, which has become chaotic in many big cities around the world.
The evolution of human mobility throughout the years is something we just have to appreciate—and admit—is an absolutely mind-blowing achievement in human history.
This incredible and long revolutionary process has given us our modern, fast-paced routine—going to work, hitting the gym, stopping by the supermarket, doing monthly shopping, etc.—all in just a few hours. That would have been unimaginable centuries ago. But every rose has its thorns, right? And traffic is no different.
Drone photo of freeway interchange used in collision car insurance article.
All this traffic, combined with everyone’s personal driving routines, exposes us—whether we like it or not—to a daily risk of car accidents. One of the most common nowadays is vehicle collision.
That’s why it’s so important for us, as car owners, to protect our assets. After all, buying a new car isn’t cheap, right?
It’s not something we expect to happen or want to think about—but like death, accidents can happen when we least expect them.
If we could predict disasters, we all would avoid them. Since we can’t, we must prepare for them. And that’s exactly where collision car insurance becomes essential.
Collision Car Insurance – What Is It?
red car destroyed in an accident photo used in collision car insurance article, image by Usman Malik on Unsplash
Collision car insurance is one of the main types of auto insurance. Each insurance type covers different situations and types of damage. According to Investopedia, collision insurance helps you recover financially after an accident involving your own vehicle—regardless of who is at fault.
This auto collision car insurance type of insurance helps pay for repairs to your car after a crash, whether it involves another vehicle, a stationary object, or even a single-car accident like a rollover. It can also help if your vehicle is deemed a total loss after the collision.
What Does Collision Car Insurance Cover?
✅ Collision with another vehicle (even if it’s your fault)
✅ Collision with a stationary object (like a tree, pole, wall, etc.)
✅ Rollovers (when the car flips over)
✅ Accidents while parking (such as hitting another car or a wall)
Important: Collision car insurance coverage is optional unless required by your lender or leasing company.
What Does Collision Insurance Not Cover?
❌ Damage caused by weather, fire, theft, vandalism, falling objects, or natural disasters
👉 These are covered by comprehensive car insurance, not collision car insurance.
How Does Collision Insurance Work?
You choose a deductible (the amount you agree to pay out-of-pocket if an accident occurs—e.g., $500 or $1,000).
If a covered accident happens, you pay your deductible, and your insurance covers the rest of the repair costs.
Example:
If your car repair costs $3,000 and your deductible is $500:
→ You pay $500, and your insurance pays the remaining $2,500.
Collision vs. Comprehensive Car Insurance
The main difference lies in what each covers:
Collision car insurance covers crash-related damages, such as hitting another vehicle, a pole, or a fence—even if you’re at fault.
Comprehensive insurance covers non-collision events such as theft, vandalism, fire, falling trees, and natural disasters.
👉 Want a full breakdown of comprehensive insurance? Check out our guide: Comprehensive Car Insurance in 2025: Everything You Need to Know Before Buying.
Who Really Needs Collision Insurance?
It’s highly recommended if:
- You have a new or high-value car
- You are leasing or financing your vehicle (usually required in these cases)
- You don’t have enough savings to cover expensive repairs
Who Might Not Need It?
It might not be worth it if:
- You have an older vehicle with low market value
- You could easily replace your car without financial strain
💡 Use the 10% Rule:
If the annual cost of the collision car insurance + deductible is more than 10% of your car’s value, it might not be a good deal.
How Much Does Collision Insurance Cost?
Several factors affect the cost:
- Vehicle value
- Your location (state, city, neighborhood)
- Your driving history (accidents, tickets, claims)
- The type of car you drive
- The deductible you choose
🇺🇸 In the U.S., the average annual cost ranges from $300 to $800, but this can vary significantly by state and driver profile.
Pros and Cons of Collision Insurance
Pros:
✔ Covers expensive car repair costs
✔ Brings peace of mind
✔ Helps in hit-and-run or when fault is disputed
Cons:
✘ Can be expensive for low-value or old cars
✘ High deductibles reduce its usefulness in minor accidents
✘ Might not be cost-effective for everyone
When Collision Insurance Makes Sense
photo of the front of a car destroyed in an accident used in collision car insurance article, image by Odinei Ramone on Unsplash
💡 It’s a good idea if:
- You commute daily or drive long distances
- You drive through busy or dangerous routes
- You work with your car (Uber, Lyft, deliveries)
- You drive in high-traffic areas often
How to File a Collision Insurance Claim
- Document everything: Take photos, write down details, file a police report if necessary
- Contact your insurer as soon as possible
- Take your car to an authorized repair shop
- Receive payment from the insurance company for covered damages
Tips to Save Money on Collision Insurance
- ✅ Choose a higher deductible to lower your monthly premium
- ✅ Bundle policies (home + auto) with the same insurer
- ✅ Ask about discounts (good driver, multi-car, low mileage, etc.)
FAQs
Q: Is collision car insurance mandatory?
A: No, unless your vehicle is leased or financed.
Q: Does collision car insurance cover hit-and-run accidents?
A: Sometimes, yes—but it depends on your policy. Always check with your insurer before signing.
Q: Can I buy collision car insurance without comprehensive insurance?
A: Yes, it’s possible. But most people choose to have both to be fully protected.
Q: Is it worth having for old cars?
A: Only if your car still has significant value. Otherwise, the cost of insurance + deductible may exceed the car’s value.
You May Also Like:
👉 Comprehensive Car Insurance in 2025: Everything You Need to Know Before Buying