Collision car insurance is a type of coverage that helps pay for repairs or replacement of your vehicle if it is damaged in a collision with another vehicle or object, regardless of who is at fault. This coverage is separate from comprehensive insurance, which covers non-collision-related damages such as theft or natural disasters.

Lease and finance requirements

If you lease or finance a vehicle, collision car insurance is often required by the leasing company or lender. This requirement is in place to protect their financial interest in the vehicle. Since the leased or financed vehicle serves as collateral for the loan or lease, the leasing company or lender wants to ensure that it can be repaired or replaced in case of an accident.

Importance of collision car insurance

Even if collision car insurance is not legally mandated, it is highly recommended when you lease or finance a vehicle. Without collision coverage, you could be held responsible for the cost of repairs or replacement out of your own pocket, which can be significant. Collision coverage provides you with financial protection and peace of mind, knowing that your vehicle can be repaired or replaced if it is damaged in a collision.

Choosing the right insurance coverage

When leasing or financing a vehicle, it is crucial to carefully review the terms and requirements set by the leasing company or lender. They will specify the minimum amount of collision car insurance coverage you need to carry. However, you may choose to exceed the minimum requirements to ensure you have adequate protection.


To make an informed decision, compare quotes from different insurance providers, consider your budget and deductible options, and consult with an insurance professional who can help you understand the terms and conditions of your policy. Remember, collision car insurance not only satisfies the requirements of your lease or loan but also provides valuable coverage for your vehicle in case of an accident.

About the Author: CompuQuotes Editorial
Get smart about saving money on insurance