Collision coverage
Pays to repair or replace your vehicle after an accident.
Full definition
Collision coverage pays for damage to your vehicle when it collides with another vehicle or object, regardless of fault. If you hit a guardrail, get rear-ended and your car is damaged, or roll your vehicle, collision coverage pays for repairs up to your vehicle's actual cash value, minus your deductible. It's optional if you own your car outright, but required if you're financing or leasing.
Real-world example
You back into a pole in a parking lot. Damage: $1,800. Your collision deductible: $500. Your insurer pays $1,300.
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Pays to repair or replace your vehicle after an accident.
Related terms
- Comprehensive coverage
Covers non-collision damage like theft, weather, and fire.
- Deductible
The amount you pay out of pocket before insurance kicks in.
- Full coverage
A package including liability, collision, and comprehensive coverage.