Collision coverage is a type of auto insurance that reimburses the insured for damage sustained to their personal automobile, due to the fault of the insured driver. This form of coverage is designed to cover the cost of repairs to a damaged vehicle following an accident which involves a collision with another vehicle or object, such as a tree or a streetlight, or in the event of a rollover. It does not cover damage to another person’s vehicle or property, nor does it cover injuries to any party involved. Collision coverage is generally optional unless required by the terms of a vehicle lease or finance agreement. The policyholder is responsible for paying a deductible, which is a predetermined amount of money the insured must pay before the insurance company’s coverage begins. The insurance company will pay for repair costs above the deductible, up to the actual cash value of the vehicle at the time of the collision.
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