As a large body of statistical evidence will show, cars and trucks run into one another, or make unintended contact with other objects, with understandable but unfortunate frequency. Collision coverage is that coverage under a policy of motor vehicle insurance by which an insurer agrees to provide an insured with indemnification for damage to a covered vehicle resulting from such incidents.
Under the collision coverage provision of a policy, an insurer agrees to pay an insured for damage to a covered vehicle caused by an accidental occurrence that is typically described as involving a “collision” or an “upset.” Unlike liability coverage, which is intended for the protection of third parties involved in accidents with insured vehicles, collision coverage, which is a comparatively expensive coverage to maintain, is often made a voluntary matter between the insurer and insured rather than a mandatory type of coverage under a policy. While a collision is ordinarily thought of as an incident in which two motor vehicles strike one another, producing damage to one or both of them, the extraordinary variety of ways in which cars and trucks can sustain physical damage can raise legal issues concerning whether a particular incident in which a vehicle comes in contact with an object other than another vehicle — for example, a stationary object or an animal — falls within the scope of collision coverage under a motor vehicle policy.
The business of insurance in the United States, including that of motor vehicle insurance, has traditionally been regulated by the individual laws of each of the states rather than by a single unified body of federal law. As a result, legal standards governing the nature and extent of collision coverage under a motor vehicle policy will vary from state to state, and will be found in the state statutes regulating the business of insurance and in court decisions dealing with insurance law.