Is Collision Coverage Worth Buying?
Collision coverage pays to repair your own vehicle after an at-fault or single-car accident. Buy it and you pay a premium every year but only a deductible when an accident happens. Skip it and you save on premiums but must cover the full repair bill yourself. Which is better depends on how likely you are to have an accident and how expensive repairs would be.
For example, with a $350 annual premium, a $500 deductible, and a 10% annual accident probability, the expected cost with coverage is about $350 + $50 = $400. Without coverage, at a $2,500 average repair cost, the expected cost is only $250. Under these numbers, skipping coverage looks statistically cheaper on average.
Keep in mind this is an expected-value comparison — a single accident could still cost far more than the average. If you want to avoid a large unexpected expense, buying coverage may be the safer choice even if the expected value slightly favors skipping it. Weigh your accident history and financial cushion before deciding.
Frequently Asked Questions
Collision coverage pays for damage to your own vehicle caused by an at-fault accident. Without it, you must pay the full repair cost yourself for single-car accidents or accidents you caused.
Look at your accident history over the past 3-5 years, driving habits, and annual mileage. If you don't have exact data, a rough estimate of 5-15% per year is a reasonable starting point.
A deductible is the amount you pay out of pocket before insurance covers the rest of a claim. A higher deductible lowers your premium but increases your cost when an accident happens.