Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Former Farmers Insurance CSR

UPDATED: Nov 12, 2020

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Collision coverage is insurance designed to pay for damages to your car in the event of an accident. It covers damages and repairs to your vehicle (not the other guy’s) when it hits, or is hit by, another vehicle or object. It will cover damages regardless of whether or not you were at fault.

Well then, how much protection does collision coverage provide? This all depends on your deductible (or the amount of the claim that you’re responsible for paying). Higher deductibles usually lower the costs of your premiums, but also can increase the money that is taken out of your pocket. If you get into an accident and the damages total $2500, yet your deductible is $2000, you will have to pay $2000 to get your car repaired while your insurance company will only have to pay $500.

Whether or not you decide to buy collision coverage is a tough decision to make. For some people, adding collision coverage doesn’t make much sense. For others, adding it is a must. Below, we look at the pros and cons of adding this type of insurance coverage to your car insurance policy.

Do You Need Collision Coverage in Your Auto Insurance Policy?

In most circumstances, having collision coverage is optional, but there are many good reasons why you should still include it in your policy.

If collision coverage is optional, why bother with it? Can’t you just sue the driver ruled to be at fault? Or at least have their insurance pick up the tab? Well, there are still several reasons why having collision coverage is a good idea:

  1. Even if you think you are invincible behind the wheel, people always make mistakes. Although you may have never been in an accident, it is still possible (knock on wood). I mean, what are you going to do if you are driving down the street one day and a little boy pops out into the road chasing his basketball? Will you swerve into the driver next to you, or will you run over the little boy? Think about it – anything can happen on the road. It is still possible that you will cause an accident or be held responsible for one.
  2. If you are in an accident that is clearly the other driver’s fault, the courts can still rule against you. After all, if you are driving down the road and the driver in front of you slams on his breaks for no reason and you don’t have enough time to stop, it’s going to be pretty hard to prove that you didn’t slam into him (instead of the other way around).
  3. What if you got into an accident and ruled not-at-fault yet the other guy does not have liability insurance? You could sue him, but what if he doesn’t have any money? What if it’s a hit and run and you never see him again? Collision coverage could pay for you in these situations, but if you don’t have it, you could be left out to dry.
  4. What if the weather outside is terrible and the roads are slippery? You could start to slip and slide, and next thing you know, your car is wrapped around a telephone pole. In this instance, there will be nobody to sue (unless you sue the government for placing a telephone pole there, but I doubt that will hold up in court). Unless you have collision coverage, you will need to pay for damage to your vehicle yourself.
  5. If your car is financed or leased, the bank will probably require that you carry collision coverage. If you need a loan for the vehicle, the bank technically still owns it. They certainly don’t want anything to happen to it. Most banks insist that you carry collision coverage for the life of the loan.
  6. If you have an expensive luxury car or a classic car, you should get collision coverage for sure. It might cost a lot to insure, but repairs on those things could cost a fortune. Accidents with these types of cars can be a financial disaster.

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Can You Get Rid of Your Collision Coverage?

There are also some circumstances in which you should think about dropping collision coverage:

  1. If you have an older vehicle or one in poor condition, you might want to think about opting out of collision coverage. Say if your vehicle is only worth $2,500. Often times collision coverage is around $500 per year. You have to ask yourself – Is it really worth paying $500 yearly to insure a car that is only worth $2,500? That’s 20% of the car’s value.
  2. If you have more than enough money to pay for repairs out of your pocket, consider dropping this coverage. Carefully examine your financial status before making this decision. If you don’t think you can live with paying for repairs to your car when it was someone else’s fault, you’re better off keeping this coverage. Another option is to drop collision coverage and then save the money saved in an individual “car accident bank account” to cover costs in case of an accident. This way, you could save money and still be somewhat covered.

Getting Cheap Collision Coverage

When all is said in done, collision coverage gives peace of mind to car owners of all shapes and sizes. If collision coverage is something you are interested in purchasing, please contact your insurance company to ask for ways in which you can add it to your current insurance policy. To compare rates from the leading insurance providers and find the perfect package for you and your family, please use the form at the top of this page to get free auto insurance quotes.