Collision coverage

What counts as a collision

• Hitting another vehicle
• Being hit by another vehicle
• Hitting an object — a guardrail, a pole, a wall
• A single-vehicle accident such as running off the road
• A rollover

How the deductible works

You pay the deductible and the insurer pays the rest, up to the vehicle's actual cash value. Collision carries its own deductible, separate from comprehensive, and the two don't have to match.

If someone else is clearly at fault and their insurer accepts liability, you may be able to claim against their policy instead and avoid your deductible — or be reimbursed for it once fault is settled.

It pays actual cash value, not what you paid

If the vehicle is totalled, the payout is based on what the car was worth immediately before the accident — accounting for depreciation. Not what you paid, and not what a replacement costs today.

That gap is why gap insurance exists for financed vehicles, and it's the single most common source of surprise after a total loss.

When to stop carrying it

As a vehicle depreciates, the maximum possible payout falls while the premium doesn't fall as fast. At some point the coverage stops being good value.

The honest test: compare the annual premium plus your deductible against what the insurer would actually pay if the car were totalled tomorrow. If those numbers are close, it's a fair question to raise — though a lender or lessor will usually require the coverage regardless.