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🚗 '''Collision coverage''' is a first-party [[Definition:Automobile insurance | automobile insurance]] protection that pays to repair or replace the [[Definition:Policyholder | policyholder's]] own vehicle when it is damaged in a collision with another vehicle, object, or surface — regardless of who is at fault. It sits alongside [[Definition:Comprehensive coverage | comprehensive coverage]] as one of the two main physical-damage components of a personal or [[Definition:Commercial auto insurance | commercial auto]] policy, and unlike [[Definition:Liability insurance | liability coverage]], it responds to the insured's own property loss rather than to a third party's [[Definition:Claim | claim]]. In the United States, collision coverage is generally optional unless a [[Definition:Lienholder | lienholder]] or lessor requires it as a condition of financing.

⚙️ After a covered collision event, the insured files a claim and the [[Definition:Claims adjuster | adjuster]] inspects the vehicle to estimate the cost of repair. The insurer then pays the repair amount — or the vehicle's [[Definition:Actual cash value | actual cash value]] if it is [[Definition:Total loss | totaled]] — minus the policy's [[Definition:Deductible | deductible]], which the policyholder selected at the time of purchase. Higher deductibles lower the [[Definition:Premium | premium]] but increase the driver's out-of-pocket obligation at claim time, a trade-off that [[Definition:Insurance agent | agents]] routinely discuss during the quoting process. If the insured is not at fault, the carrier may pursue [[Definition:Subrogation | subrogation]] against the responsible party's insurer to recover the payout and, often, the deductible on the policyholder's behalf.

📊 Collision coverage is one of the most frequency-sensitive components of an auto policy, making it a rich area for [[Definition:Predictive analytics | predictive analytics]] and [[Definition:Telematics | telematics]]-driven [[Definition:Usage-based insurance (UBI) | usage-based insurance]] models. Driving behavior data — hard braking, speed, mileage — directly correlates with collision likelihood, and [[Definition:Insurtech | insurtech]] programs that capture this data in real time enable more precise [[Definition:Rating | rating]] and personalized [[Definition:Discount | discounts]]. For carriers, managing the [[Definition:Loss ratio | loss ratio]] on collision coverage depends heavily on repair-cost trends, parts availability, and relationships with body-shop networks, all of which have come under pressure as vehicles grow more complex and technology-laden.

'''Related concepts'''
{{Div col|colwidth=20em}}
* [[Definition:Comprehensive coverage]]
* [[Definition:Automobile insurance]]
* [[Definition:Actual cash value]]
* [[Definition:Subrogation]]
* [[Definition:Deductible]]
* [[Definition:Usage-based insurance (UBI)]]
{{Div col end}}

Definition:Collision coverage - Revision history

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