Collision Insurance Coverage: What It Is & Why It’s Important – Nationwide (2024)

Let's start off with a quick definition of collision insurance: collision insurance is a type of auto insurance that can cover you in the event of a crash or accident with another vehicle or object if your car needs to be repaired. Unlike liability insurance, your collision insurance policy kicks in even if you are found at fault. While this collision coverage definition may sound simple enough, collision insurance can apply to a wide range of accident types. Broadly speaking, collision can potentially apply to the following situations:

• An accident involving only your car, such as rolling over
• An accident with another object, such as a phone pole or sidewalk
• An accident with another vehicle, such as a traffic crash or someone hitting your car while it’s parked on the street

Be aware that collision insurance only reimburses you for damage to your car – not for damage to other vehicles or objects, or for bodily injuries sustained in the accident.

What does collision insurance cover?

You already know that collision coverage applies to vehicular damage as a result of an accident with another car or object, or an accident involving only your car. But every accident is unique – so what exactly does collision cover?

What is the difference between comprehensive and collision insurance?

With collision insurance, you’re covered for accidents involving objects or other cars, but what about other kinds of damage? What if a storm blows a tree limb through your windshield, or you hit a deer while out driving at night? In these instances, you need comprehensive insurance. You can think of comprehensive insurance and collision insurance as two halves of the same whole. Collision covers incidents involving objects or other cars, and comprehensive covers, well, almost everything else! Damages to your car from theft, hitting an animal, natural disasters, and civil disturbances are all covered by comprehensive insurance.¹

Do I need collision insurance coverage?

You may be thinking to yourself, “I’m a responsible driver. Do I really need collision insurance?” While collision insurance isn’t required by state law, it’s always a smart option – with so much on the road that you can’t control, do you really want to risk paying thousands of dollars out of pocket for damage to your car after an accident? Collision coverage helps you protect your investment, especially when paired with liability and comprehensive coverages. If you are leasing your vehicle or making payments (as opposed to owning your vehicle outright), your finance company may require that you purchase both collision coverage and comprehensive coverages. Check with your auto lender about whether collision coverage is required. Collision coverage is especially important for new drivers, such as teens, who have less experience on the road.

Frequently asked questions

Is collision insurance required by law?

Collision insurance is important, but you’re not required by law to have it. However, if your car is not fully paid off, your lender or lessor may require you to have it. Regardless, insuring your car against collision-related damages is always a good idea, particularly if you drive often or in areas of high-volume traffic.²

Does collision insurance cover theft?

No. Theft may be covered by your comprehensive insurance coverage.

Does collision insurance cover rental car accidents?

If you have a collision coverage, it may cover you in the event your rental car is damaged. However, rental car insurance coverages vary by state. Be sure to check with your rental provider for specifics around rental insurance coverage.

Does collision insurance cover vandalism?

No, collision coverage will not cover vandalism, but your comprehensive coverage may.

Is collision insurance needed for an old car?

The age of your car doesn’t change the rules around whether you need to insure it. A 15-year-old car isn’t required by law to be insured any more than a brand new one is. Like any car though, older cars may still need collision insurance if they’re not fully paid off and the lender or lessor requires it. If your car is paid off, consider how much value it holds. Collision coverage pays for repairs up to the actual cash value of your car at the time of the accident, so that value is instrumental in determining how much value you’ll get out of your policy. Most cars lose value as they age and accrue miles, but if yours holds up over the years, then insuring it will continue to be worthwhile.³

Does collision insurance cover other drivers?

No, collision coverage only applies to damages incurred to the policyholder’s vehicle in the event of a covered collision. If you are found at fault in an accident, your liability insurance may cover damages to the other car.

Does collision insurance cover hit-and-run accidents?

It depends on what kind of hit-and-run it is. If a driver hits your car while it’s parked, your collision policy may cover damages to your car. However, it would not apply to bodily injuries sustained as a result of a hit-and-run accident. Collision insurance covers a wide variety of incidents, and can be a smart addition to your car insurance policy. Find out more about Nationwide collision insurance and get a free quote today.