Collision insurance covers damage to your car when your car is damaged in a collision. You are covered if your car runs into something (such as another car) or if another car runs into yours. The insurance will pay to fix your vehicle less the deductible you choose. You pay the deductible, and the insurance company pays the rest. Coverage is normally limited to the cash value of your car, so many drivers of older cars just drop this coverage since the car might not be worth much anyway.