When you have an accident, either with another car or a stationary object, your collision insurance pays to repair the damage to your vehicle. The exact cost varies by the state you live in, the type of car you buy, and how much of a deductible you choose. The higher your deductible, the lower your auto insurance premiums will be.

If your car is entirely paid off, collision insurance is considered optional coverage. If you own a car that has a lot of value, such as a speedy sports car, then you should consider keeping collision coverage, even if you have paid the car off. If you haven't fully paid off your car or are leasing it, collision insurance may be required.

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Does car insurance cover repairs?

How much does collision insurance cover?

Like many types of car insurance, collision coverage has a maximum amount it will cover in an accident. The amount you need depends on the value of your car—also known as the actual cash value. When buying an insurance policy, ask your insurance agent how your carrier calculates actual cash value.

You want enough coverage to be able to repair your car if it is damaged in an accident and to pay it off if it is totaled. Otherwise, you could be left paying for what your collision insurance does not cover.

Collision insurance also covers you if you hit an object, such as a pole or tree. Collision insurance pays to repair your car if you are involved in a roll-over accident or suffer damage to your car from a pothole, too.

Key Takeaway: Collision coverage will take care of most accidents that involve a moving car.

What does collision insurance not cover?

However, there are some situations where collision coverage cannot be used. Any damage done to a vehicle when it's stationary usually isn't protected.

The only time you should consider dropping your collision insurance is when your annual car insurance premiums are worth 10% of your car’s value. So, if your car is only worth $1,000 and the cost of your collision insurance is $100, then you can safely drop it. At that point it's just not financially worth it.

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Does collision insurance cover if I’m at fault?

If you live in an at-fault state and you have a car accident that is your fault, your collision coverage will pay to repair your vehicle, while your liability insurance will pay for the other driver’s damage. If the accident was the other driver’s fault, their liability insurance will pay to repair the damage to your car.

If for some reason the damage to any vehicle involved in the wreck exceeds the maximum coverage amount of the insurance, then the vehicle owner will be left to cover the difference. In such cases,

legal action

) might be necessary.

In no-fault states, each driver’s insurance company covers the repair costs for their own vehicle. Anything over the maximum coverage offered by collision insurance has to be paid out of pocket. In some no-fault states, drivers have the option of taking the at-fault driver to court to sue for any unpaid damages.

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How do I find a good deal on collision insurance?

Regardless of how much coverage you need, it's still vital to find the right package at the right price. To get the best deal, try

Jerry

. If you want to save money on car insurance, the Jerry app is a good place to start. A licensed broker, Jerry does all the hard work of finding the cheapest quotes from the top name-brand insurance companies and buying new car insurance. Jerry will even help you cancel your old policy.

And to ensure you always have the lowest rate, Jerry will send you new quotes every time your policy comes up for renewal, so you’re always getting the coverage you want at the best price.

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