Define: Collision Insurance

UK Accounting Glossary

Definition: Collision Insurance


Quick Summary of Collision Insurance


Collision insurance is a coverage that helps pay to repair or replace your car if it’s damaged in an accident with another vehicle or object, such as a traffic light or a tree. If you’re renting or financing your car, collision coverage is typically required by the lender.



What is the dictionary definition of Collision Insurance?

Dictionary Definition


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


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Full Definition of Collision Insurance


Collision Insurance is a form of vehicular insurance that covers physical damage and injury.

  1. In comprehensive insurance, the insurer pays for the damage to the insured’s vehicle and (if the insured is at fault) to the other vehicle(s), as well as for personal injury and private property damage arising out of the collision.
  2. In third-party insurance, only the loss and/or injury sustained by the party other than the insured is covered.

Collision insurance is a type of auto insurance and will reimburse the insured claimant for damage or loss in a car accident which is the fault of the insured driver. Drivers should verify that their collision insurance covers their medical costs as well as the costs to repair or replace their car. Drivers should also verify what types of collisions are covered. Some companies only cover collisions with other cars while other policies allow insurance coverage to include coverage for collisions with cars, building structures and other types of personal or public property.

Collision insurance generally does not cover acts of God, storms and storm-related damage like hail natural disasters, damage from riots, damage from fire, or theft or damage from vandalism. If a driver needs additional coverage for these disasters they need to discuss their options with an insurance agent to determine if they should invest in comprehensive insurance coverage.

Also sometimes known as collision coverage.


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Cite Term


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Page URL
https://payrollheaven.com/define/collision-insurance/
Modern Language Association (MLA):
Collision Insurance. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. April 04, 2020 https://payrollheaven.com/define/collision-insurance/.
Chicago Manual of Style (CMS):
Collision Insurance. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/collision-insurance/ (accessed: April 04, 2020).
American Psychological Association (APA):
Collision Insurance. PayrollHeaven.com. Retrieved April 04, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/collision-insurance/

Definition Sources


Definitions for Collision Insurance are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 1st April, 2020