Collision Insurance

What is 'Collision Insurance'

Collision insurance is a type of auto insurance coverage. Collision Insurance will reimburse the insured for any damage sustained to their personal automobile that is due to the fault of the insured driver. This type of insurance is often added as an extension of a basic policy.

BREAKING DOWN 'Collision Insurance'

As the name implies, Collision Insurance repays the insured for damage from an actual collision. It does not cover damage due to theft or vandalism. It also does not cover damage that is paid from another driver's policy, if the other driver was at fault.

RELATED TERMS
  1. Comprehensive Insurance

    A type of automobile insurance that covers damage to your car ...
  2. Personal Lines Insurance

    Property and casualty insurance products for individuals that ...
  3. Assigned Risk

    A risk that an insurance company is required to provide coverage ...
  4. Broad Form Insurance

    Insurance coverage that extends beyond the basics to include ...
  5. Cover Note

    A temporary document issued by an insurance company that provides ...
  6. Insurance Industry ETF

    A sector-following fund that invests primarily in insurance companies, ...
Related Articles
  1. Professionals

    Physical Damage Under Automobile Insurance

    Physical Damage Under Automobile Insurance
  2. Insurance

    When To Drop Collision -- And Risk It All

    Thinking about dropping the collision coverage on your trusty but aging jalopy? You're most likely to do so after the car's eighth birthday.
  3. Home & Auto

    Intro To Insurance: Fundamentals Of Insurance

    By Cathy ParetoHow does insurance work? Insurance works by pooling risk.What does this mean? It simply means that a large group of people who want to insure against a particular loss pay their ...
  4. Home & Auto

    Intro To Insurance: Conclusion

    By Cathy ParetoInsurance is an integral part of any personal financial plan. The type of insurance and the amount of coverage you obtain all depends on your unique financial and family circumstances, ...
  5. Investing Basics

    The Industry Handbook: The Insurance Industry

    As a result of globalization, deregulation and terrorist attacks, the insurance industry has gone through a tremendous transformation over the past decade. In the simplest terms, insurance of ...
  6. Insurance

    Top 5 Car Insurance Companies in Texas (PGR, ALL)

    Examine the five biggest automobile insurance companies operating in the state of Texas, ranked based on market share in the state.
  7. Home & Auto

    Bundle Your Insurance For Big Savings

    Bundling your insurance can save you money and time. Read on to see how get the most out of multiline insurance discounts.
  8. Home & Auto

    Intro To Insurance: Property And Casualty Insurance

    By Cathy ParetoProperty and casualty insurance is insurance that protects against property losses to your business, home or car and/or against legal liability that may result from injury or damage ...
  9. Insurance

    Millennials Guide: Picking the Right Car Insurance

    Millennials fall into the category of high car-insurance rates. Check out some of the ways to save money, like owning an older car or leasing a vehicle.
  10. Personal Finance

    1. You May Not Need Collision Insurance

    Not all insurance companies are out to get you, but you should still learn how to save money when dealing with unscrupulous insurers.
RELATED FAQS
  1. Can your insurance company cancel your policy without notice?

    Learn about your rights as an insured when it comes to your insurance policy being canceled, including how to access your ... Read Answer >>
  2. What is the average return on total revenue for the insurance sector?

    Learn about the three main segments of the insurance industry, and find out what the average return on revenues is for the ... Read Answer >>
  3. Suppose my garage collapsed onto my car. Are damages covered by my home insurance ...

    Generally, damage to an automobile will be covered by comprehensive car insurance, which is in addition to collision coverage ... Read Answer >>
  4. What are some examples of industries that practice price discrimination?

    Understand the various types of insurance coverage offered in the insurance marketplace, and learn why each policy should ... Read Answer >>
  5. What are some examples of when insurance bundling is a bad idea?

    Learn about situations where insurance bundling may not be a favorable option. Bundling insurance is often a good idea, but ... Read Answer >>
  6. What are examples of the largest companies in the insurance sector?

    Read about some of the largest and most influential companies in the insurance sector, a list that includes Berkshire Hathaway ... Read Answer >>
Hot Definitions
  1. Goodwill

    An account that can be found in the assets portion of a company's balance sheet. Goodwill can often arise when one company ...
  2. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  3. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  4. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  5. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  6. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
Trading Center