Collision coverage is the part of an auto policy that pays to repair or replace your own vehicle after a crash, whether you hit another car or a fixed object like a guardrail or a fence. It pays regardless of who was at fault, minus your deductible.
Collision is optional under most state laws, but an auto lender or lessor almost always requires it until the loan is paid off, because the car is their collateral.
Example: a driver slides on wet pavement and hits a utility pole, causing $9,000 in damage. With a $500 deductible, collision coverage pays $8,500 and the driver pays the first $500.
Related: comprehensive coverage, deductible, liability coverage. See the auto insurance overview.