Collision Insurance

Business, Legal & 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. Collision insurance generally covers the amount of damage over and above an amount the insured person must pay, called the “deductible” amount.

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.

Synonyms For Collision Insurance

Collision Coverage

Cite Term

To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
Modern Language Association (MLA):
Collision Insurance. Payroll & Accounting Heaven Ltd. September 25, 2021
Chicago Manual of Style (CMS):
Collision Insurance. Payroll & Accounting Heaven Ltd. (accessed: September 25, 2021).
American Psychological Association (APA):
Collision Insurance. Retrieved September 25, 2021, from website:

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: 22nd April, 2020 | 3 Views.