Two drivers discussing collision insurance after accident

Considering Collision Insurance

Updated January 1, 1 . AmFam Team

Getting collision insurance on an older car usually isn't necessary if its value is less than $3,000. Learn more about collision insurance from American Family.

No state requires the purchase of collision insurance — so why do people have it? There are actually many ways collision insurance helps protect you when you’re on the road, and when it comes down to it, you can’t go wrong with the added peace of mind it provides.

Let’s take a look at the ins and outs of collision insurance, so you’re informed when deciding if it’s right for you.

What Is Collision Insurance?

Collision insurance is an optional coverage that helps cover your car if it’s damaged by another vehicle or object, like a tree or mailbox. It’ll help pay for damages whether you’re at fault or not. Usually, when you get in a covered accident, you’ll pay a deductible before the insurance kicks in.

Let’s break it down:

What is covered by collision insurance?

  • A collision with another vehicle, whether it was your fault or not.
  • A collision with an object, like a tree, mailbox, fence, pole, even potholes.
  • A single-car accident that involves a roll-over, for instance from black ice.

What is not covered by collision insurance?

  • Damage to another person’s vehicle. (That’s what liability insurance is for.)
  • Damage to your vehicle caused by something not related to driving. (That’s what comprehensive coverage is for.)
  • Yours or someone else’s medical bills. (That’s what medical expense coverage is for.)

Why Is Collision Insurance Important?

Imagine you’re driving down a highway on a snowy winter day. The snowplows are clearing the roads ahead and you think you’re in the clear. Suddenly, your car begins to slip and you can’t maintain control of your vehicle, causing you to slam into the car in the next lane. Fortunately, no one is seriously injured, but unfortunately, both cars took on some serious damage.

You provide your insurance information to the other driver, and your property damage liability insurance will take care of their damages. But what about your vehicle? You take a gander at the front end of your car and realize it’ll be a pretty penny to repair. Thank goodness you have collision insurance! All you have to do is pay your deductible and your insurance company should cover the rest.

Now imagine you didn’t have collision insurance. How much would it cost to repair or even completely replace your vehicle if it was totaled? If you wouldn’t be able to afford the costs to repair your car, or even more so, buy a new one to replace it, having collision insurance is that added layer of protection that can prevent you from financially being responsible for expensive damages — and that’s really important.

Why You Might Need Collision Coverage

As mentioned before, no state requires you to purchase collision insurance coverage, but that doesn’t mean you don’t need it. Consider the following:

Do you have a lease or loan on your vehicle? A leasing and financing company typically require you to have collision coverage when you lease or take out a loan on your vehicle.

What’s the actual cash value (ACV) of your vehicle? Find out the cash value of your vehicle and compare it to your collision premium — is it worth it to continue the collision coverage if your car isn’t worth that much? That’s your judgement call, since you’ll decide what you can afford to repair or replace your car if you get into an accident.

Don’t forget to consider your deductible here too. If you have a high deductible, say $1,000, and your car’s ACV is only $1,500, is it worth it to fork out the premium each month for collision? Again, that’s up to you, but it’s important to consider what you’re actually paying for when deciding if you need collision or not.

Do I Need Collision and Comprehensive Coverage?

Collision and comprehensive coverage often go hand in hand when purchasing auto insurance. You now know how collision covers you — here are some ways comprehensive coverage protects you:

  • Damages to your car from things like vandalism, hail, fire, falling objects, flooding, rocks cracking windshields.
  • Damage to your car from hitting an animal, like a deer.
  • If your car is stolen and not found, you can receive the actual cash value for your vehicle.

Most insurance companies require that you purchase comprehensive if you purchase collision. On the other hand, if you only want to purchase comprehensive, you don’t have to purchase collision.

How do you know if you need these coverages? Consider the following circumstances:

  • Is your car less than 10 years old?
  • Is your car more than 10 years old and worth more than $3,000 or more?
  • Can you afford to repair or replace your car if it’s damaged, totaled or stolen?

Again, it mostly comes down to what you can afford if you were to get into an accident. Take some time to determine what you’d pay for collision and comprehensive coverage annually, how much your car is worth, and how much you could afford to pay out of pocket if you were in an accident. What makes the most sense for you?

Should I Get Collision Insurance on an Old Car?

Your car may be old, but what’s its actual cash value? You can find that out by using the reliable Kelley Blue Book Online (Opens in a new tab), which will help you get a solid estimate on the value of your vehicle.

Is it worth it to get collision coverage for an old car? Usually, if its value is less than $3,000, you probably don’t need collision coverage since the price of paying your premiums would eventually surpass what your car is even worth.

Is Collision Insurance Necessary for a Rental Car?

Whether it’s through your own provider or purchasing a loss damage waiver (LDW) through the rental company, it’s good to have some form of collision insurance to rent a car — and you’ll want it since you’re liable for any damages that occur to the vehicle while it’s in your possession.

That being said, some rental companies don’t require you to have collision coverage as long as you sign on the line that you’re responsible for any damages.

Having collision insurance on your own policy generally extends to a rental car, much like you other coverages will. But to be sure, give a call to your agent and make sure this is the case. And if you don’t have collision coverage, ask the rental agency what coverage you’ll need to be covered for damages and repairs to the vehicle.

How Much Does Collision Coverage Cost?

The price for collision coverage differs with every person and every insurance company, but there are three main factors that determine the cost of your collision coverage:

Driving history. If you’ve had several accidents, you’ll probably be paying more for collision coverage than someone with a clean record.

Value of your vehicle. Is your car worth a lot? Your premium for collision coverage will be higher than someone with a less expensive vehicle, since it’ll cost more for repairs or to replace your car.

The size of your deductible. A deductible is the amount of money you’ll pay for damages and repairs before your insurance company steps in to cover the rest (up to your policy’s limits). Usually, your deductible ranges from $100-$1,000, and the lower deductible you pay, the higher your premium. Vice-versa — the higher you pay for your deductible, the lower your premium will be.

If you’re considering getting collision insurance but aren’t sure if you can afford it, give your insurance agent a quick call — they’ll help you determine an estimate.

How Much Collision Insurance Do I Need?

Collision insurance covers the repair or replacement cost for your vehicle in the event you get into an accident, and your collision coverage limit will be based on how much your vehicle is worth. Since your collision coverage limit is determined by your vehicle’s value, your focus should be on the deductible. Remember, the deductible is the amount of money you’ll pay out of pocket before your insurance covers the rest. So, you’ll need to decide how you went to set your deductible — pay more in premiums and less in the event of an accident, or pay less in premiums and more in the event of an accident.

Is Collision Insurance Worth It?

If your car is paid off and you plan on driving it for a long time, if your vehicle is worth a good chunk of change, or you simply want peace of mind that you have that extra layer of protection — collision insurance is absolutely worth it.

Having this coverage can save you a lot of money out of your own pocket (and stress!) if you were to get into an accident, and though we hope you avoid any accidents, you never know when the unexpected will happen.

So, Should I Get Collision Insurance?

The short answer? That’s up to you and your unique situation. Do your research and get informed — collision insurance isn’t for everyone, but it is for a lot of people.

Being educated on your auto insurance can save you money in the long run! If you have any questions about collision insurance, get in touch with your American Family Insurance (Opens in a new tab) agent (Opens in a new tab) to determine what the best coverage is to keep you driving forward.

Related Articles

  • Mechanic replaces a car's windshield.
    Mechanic replaces a car's windshield.
    Windshield Repair & Replacement Insurance Coverage

    Rocks and gravel, damage from weather and even temperature changes are all common causes of a cracked, broken or chipped windshield. It might surprise you that repairing a cracked windshield is actually a pretty simple fix — as long as you take care of it right away. Because what may seem like a small, insignificant crack at first could turn into a bigger, more expensive problem if left unrepaired.

    We know the question you want answers to: Will my insurance cover windshield repair and replacement? The short answer is yes, with some minor stipulations. We’ve highlighted some key information about windshield repair and replacement to help you understand how your insurance helps cover these small but impactful damages.

      Person driving while the passenger looks at a map.

    Do I need a repair or a replacement?

    Did you know that a small chip or crack reduces the strength of a windshield by up to 70%?* And eventually those small cracks spread into larger cracks that just might require a full replacement (which means more money out of your pocket). Getting your chip or crack repaired right away helps preserve the structural integrity of the windshield, which is a critical safety feature of your vehicle, and almost always prevents damage from spreading into a more costly replacement.

    To determine if your windshield needs a simple repair or a full-on replacement, you’ll need to identify what kind of damage exists. For example, if you have a small break, like a half-moon, bullseye, star or combination, you’ll typically be able to get a quick repair — which usually only takes about 30 minutes to fix.

    Here’s a list of common types of cracks:

    Chip or ding. Usually, small chips or dings are caused by a rock or other hard object hitting the windshield and taking out a small chunk of glass. Though small and usually not impeding your line of sight, a chip or ding could eventually spread and require a full windshield replacement. So, take the time to get it repaired right away!

    Bullseye. A bullseye crack looks just like its name — and it’s usually one of the most common types of windshield damage. The good news is it’s one of the most repairable kinds of cracks.

    Stress crack. A stress crack occurs when your windshield is exposed to extreme variations in temperature in a short amount of time. For instance things like extreme or swift temperature changes like cranking up the A/C or heat can cause a chip to expand into a larger crack, or if you put hot water on your ice-covered windshield, a stress crack may form.

    Edge and floater crack. An edge crack is formed near the edge of your windshield, whereas a floater crack is near the center of the windshield. These kinds of cracks usually cover a large area of your windshield and will need a full replacement. Over time, all the bumps and other impacts that occur during driving can cause the edge or floater crack to worsen.

    Insurance adjuster taking images of windshield damages.

    Does my insurance cover windshield replacement or repair?

    Insurance coverage for windshield replacement or repair depends on what type of coverage you have and the extent of the damage.

    If your windshield is damaged in a car accident, your collision insurance would cover repairs or replacement, but you’ll be required to pay a deductible, which is the amount you pay before your insurance company steps in.

    A couple embracing while going for a coastal drive in a Jeep.

    No Deductible Windshield Replacement

    Do you have comprehensive insurance? At American Family Insurance, if your windshield is repaired instead of replaced for a covered comprehensive loss, the deductible is usually waived. Keep in mind that if the windshield needs to be replaced, you’ll still be covered, but a deductible may be applied.

    Woman looks at her smartphone while roadside assistance loads her vehicle onto the back of their truck.

    How to File a Claim to Replace or Repair Your Windshield

    American Family Insurance offers a glass repair program with our trusted partner, Safelite. With them, we’ll work quickly to get your windshield repaired or replaced so you can get back to more important things.

    Make sure you file a claim before you take your vehicle in for repairs because your agent can help you determine how you’re covered. Remember, a repair usually won’t cost you anything, but a replacement will often require a deductible.

    Person holds their phone with their car in the background.

    File Your Windshield Claim with the MyAmFam App

    File, track, and monitor the status of your claim from your phone with the MyAmFam app.

    Get in touch with our Glass Claims Department at 1-800-MYAMFAM (1-800-692-6326) or conveniently submit a claim online to Safelite.

    Have the following information on hand when submitting your claim to make sure the process goes as quickly and smoothly as possible:

    • Policy number
    • Details about the damage
    • Make, model and year of your vehicle
    • VIN

    Smiling couple goes for a drive on a sunny day.

    Does a windshield claim increase insurance?

    If you file a windshield claim, your insurance company typically won’t apply a surcharge, which is the rise in your insurance premium. However, if you do frequently file auto repair claims, your company could consider you a high-risk driver, which would cause a hike in your premium.

    Don’t forget to weigh your options when deciding to file a claim. Are you required to pay a deductible? Is the deductible going to cost more than your repairs? If so, maybe consider paying out of pocket for the repairs and avoid adding a claim to your car insurance history.

    At American Family Insurance, we want to make sure you’re confident and know all the ways you’re covered. Your agent is always happy to answer any questions you have about how you’re protected — in the meantime, check out more about our claims process so you know just what to do to keep moving forward when dealing with the unexpected.

    * Source: Belron® Technical, the world's leading vehicle glass research & development organization.

  • Judge sitting at desk with another person.
    Judge sitting at desk with another person.
    Personal Offense Coverage for Homeowners

    You probably have insurance to protect your home, car and health from the unexpected, but have you ever thought about putting protection in place in case you ever face a lawsuit for things like libel and slander? That’s where personal offense coverage comes into play. It’s a lesser known but important coverage available to add to your home insurance policy. Not sure what this coverage means? We’re here to help.

    Judge at desk signing document.

    What is a personal injury endorsement?*

    Your home insurance financially protects you from many unexpected incidents, whether you’re at your home or away from it. But personal offense coverage doesn’t fall under the realm of protection provided by your standard homeowners policy. Insurance for personal offense is actually an additional coverage you can purchase on your homeowners insurance that’ll help protect you against personal offense allegations.

    A personal injury certainly sounds like an injury that happens to you or even to another person — in fact, this type of insurance can often be confused with bodily injury or personal liability insurance. But, while bodily injury or personal liability insurance covers things like medical bills and legal fees if a guest is injured on your property, personal offense coverage covers something much different.

    Personal offense insurance covers things like:

    • Libel and/or slander
    • False arrest, detention or imprisonment
    • Malicious prosecution
    • Wrongful eviction or wrongful entry
    • Associated legal costs

    Couple looking at laptop while sitting on a couch.

    Do you need to add a personal injury endorsement to your home insurance policy?

    In today’s world, social media is more prevalent than ever. With the touch of a button, you (or your kids) can tweet, blog or post just about anything for just about anyone to view — which is why personal offense insurance is so important. Consider what would happen if someone sued you for a slanderous tweet you posted about them. Without personal offense coverage, defense costs and potential settlement fees will come right out of your own pocket.

    Or let’s say you rent out your basement apartment to a tenant, and you entered into the apartment without their knowledge. Harmless as this may seem, your tenant sues you for wrongful entry. Having personal offense protection can help cover resulting legal fees.*

    Family and friends sitting at a table having dinner.

    What doesn’t personal offense insurance cover?*

    Though personal offense coverage can help you in instances where you’re in trouble for libel or slander, it doesn’t mean you should go ahead and say or write defamatory statements. Just as your other home insurance coverages have limitations, a personal injury endorsement also has exclusions and limitations on what it’ll cover. For instance, if you knew what you were doing was wrong or what you did was illegal, you likely wouldn’t be covered.

    Kids playing tug of war in yard.

    What does personal offense insurance cost?

    Adding a personal injury endorsement to your homeowners insurance policy is rather affordable — typically adding only a few dollars a year to your premium. Personal offense coverage is an inexpensive option that’ll pay off if you or a family member face a lawsuit.

    Contact your American Family Insurance agent to learn more about adding personal injury insurance to your homeowners insurance policy. Want an easy way to access your insurance information? Log in or sign up for My Account, where you can view your insurance info, file a claim, pay your bills and much more. Even better? You can do it all from the MyAmFam app. Download it today.


  • Family and friends enjoying a backyard party.
    Family and friends enjoying a backyard party.
    What Is Homeowners Liability Insurance?

    Accidents happen, and as a homeowner, you, your children or your pets can be held responsible for injuries to people in or outside your home or damage to other people’s property. The good news is your policy can give you financial protection against covered liability claims.

    Happy kids playing soccer in a yard.

    What Personal Liability Insurance Covers*

    Your homeowners insurance provides both property and liability protection. Property insurance protects the structure of your home (dwelling coverage) and your belongings (personal property coverage). And personal liability coverage protects you if you’re legally responsible for damage to someone’s property, or if you accidentally injure someone whether you’re at home or away from it.

    How exactly does personal liability insurance protect you? Let’s break it down.

    Man on a ladder doing yard work.

    Injury on Your Property

    If someone is injured on your property, your personal liability insurance helps pay for their medical bills and other potential costs. For example, if the injury resulted from your neglect — like failing to repair a broken banister — you may even be sued. And if you’re found liable, liability coverage within your homeowners policy may help protect your finances if legal expenses result.

    Broken window on a house.

    Negligent Acts of Children and Others

    Let’s say your children are kicking a soccer ball in the yard and they accidentally kick it through your neighbor’s window. Fortunately, even though it wasn’t your own home that was damaged, if accidental damage occurs to someone else’s property by a member of your household, the liability portion of your homeowners insurance helps provide protection against associated costs from the accident.

    Two people playing tug of war with a dog in a yard.

    Dog Bites

    Whether out walking Fido or playing in your yard, the liability portion of your homeowners insurance policy will typically help provide protection if your dog bites a person or another animal. Keep in mind, not all dogs will meet the criteria to be included under your policy. Connect with your agent to check if your dog is eligible and learn more about the limits of the liability coverage. Here’s a closer look at homeowners insurance and dogs.

    Happy little girl jumping on a trampoline.

    What Personal Liability Insurance Doesn’t Cover

    Though it’s important to know the many ways in which personal liability insurance protects you, it’s also important to understand what it doesn’t cover.

    This coverage is designed to protect you if you accidentally injure or damage the property of a guest, neighbor or anyone who isn’t a member of your household. And it’s not an alternative or supplement to your health insurance. For instance, if you or a family member are injured in your home, your personal liability coverage won’t cover resulting medical bills — that’s what your health insurance is for.

    Also, if you or a family member intentionally cause harm to someone, you won’t be able to depend on your personal liability coverage for financial protection.

    Happy family eating dinner around a table in their back yard.

    Home Insurance Liability Coverage Amounts*

    Like any coverage, your personal liability coverage offers protection up to your policy limit, which is the capped amount your insurance company pays in the event of a claim. You’ll choose your coverage limit when creating your policy, and any expense that extends beyond your limit will come out of your pocket. The good news is you can increase your coverage.

    For extra protection and added peace of mind, umbrella insurance provides an additional layer of liability coverage above your policy limit, so you won’t have to dig into your own savings in the event of a substantial claim.

    For example, we mentioned that personal liability coverage helps cover you if your dog injures someone — which is an important protection to have in place. But a dog bite claim can often surpass your personal liability coverage limit. Having umbrella insurance provides an additional layer of protection should a claim exceed the liability limits you selected within your homeowners policy and helps protect your assets.

    Couple playing with their baby in the living room.

    Remember, costs can vary depending on the amount of coverage you’re looking for. That’s why your best bet is to connect with your American Family agent to discuss policy amounts and limits — they’ll help customize your policy to ensure you have the right limits for your unique needs.

  • parents on the couch with their baby looking at a computer
    Why Did My Homeowners Insurance Go Up?

    A lot of thought went into the purchase of your home. Its amenities, location, and overall design played an important role when you made the decision to place an offer on the house. Many of those same traits and features are referenced when an insurance company puts together a homeowners quote. And there are other key factors that they use to determine the cost of your premium.

    If you’re wondering “why did my homeowners insurance go up?” you’re not alone. It can be surprising to learn that your rates have increased. It may be because your property’s becoming more valuable than it was a year ago. Or maybe you invested in an addition, boosting your home’s worth. Or did you file a claim on your home sometime last year? There’s a lot to learn — when homeonwers insurance increases every year, it’s important to understand why.