Collision Coverage.

In plain English

Collision coverage pays to fix or replace your own vehicle when it is damaged in a crash, whether you hit another car, a guardrail, or a pole. It applies even when the accident is your fault, which is the key difference from relying on the other driver's liability insurance. You pay a deductible (a set amount you cover yourself) and the insurer pays the rest, up to the car's value. Lenders and leasing companies usually require it while you still owe money on the vehicle.

01Why it matters

Without collision coverage, a single at-fault crash can leave you paying for a totaled car out of pocket while still owing on the loan. It is the coverage that protects the value of the car you drive every day.

02The math, step by step

You rear-end someone and your car needs $6,000 in repairs. Your collision coverage has a deductible you chose when you bought the policy, say $500. You pay the $500 and the insurer pays the remaining $5,500, up to your car's actual cash value.

03What this is NOT

04Receipts

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