Auto insurance about to be sent to collections

So I was broke for a few months and couldn’t make the payments. Progressive insurance ended up cancelling it on Nov 21st and as I don’t drive the car at all I haven’t had a new policy yet so it’s over a month now. I’m financially alright now and want to make the payment but was told that sometimes I could end up settling for less if it goes to collections. How true is this and will it still affect my credit score if it goes to collections? First time ever missing a payment so it’s kind of stressful not knowing what exactly the consequences of all this is. Any help would be appreciated.