What Is Collision Coverage?

Collision coverage pays to repair or replace your vehicle when it's damaged in an accident with another car or object, regardless of who is at fault. It's not required by law, but lenders typically require it if you're financing or leasing a vehicle.

Updated April 2026

What Is Collision Coverage Insurance?

How Much Does Collision Coverage Insurance Cost?

  • Vehicle value and replacement cost — a $45,000 SUV costs significantly more to insure for collision than a $12,000 sedan since the potential payout is higher.
  • Chosen deductible amount — selecting a $1,000 deductible instead of $250 can reduce your collision premium by 30% to 40% but increases your out-of-pocket cost per claim.
  • Driving record and at-fault accidents — drivers with recent at-fault accidents pay 40% to 60% more for collision coverage since insurers view them as higher risk for future claims.
  • Credit-based insurance score in most states — drivers with poor credit may pay 50% to 100% more for collision coverage even with clean driving records.
  • Where you live and park your vehicle — urban areas with higher accident rates and vehicle theft typically see collision premiums 20% to 40% higher than rural areas.
  • Annual mileage — vehicles driven 20,000+ miles yearly generally cost 15% to 25% more to insure for collision than those driven under 10,000 miles due to increased accident exposure.

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Who Needs Collision Coverage Insurance?

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