In general, feature points and camera parameters can only be estimated with limited accuracy due to noisy images. In case of collinear feature points, it is possible to benefit from this geometrical regularity by correcting the feature points to lie on the supporting estimated straight line, yielding increased accuracy of the estimated camera parameters. However, regarding Maximum-Likelihood (ML) estimation, this procedure is incomplete and suboptimal. An optimal solution must also determine the error covariance of corrected features. In this paper, a complete theoretical covariance propagation analysis starting from the error of the feature points up to the error of the estimated camera parameters is performed. Additionally, corresponding Fisher Information Matrices are determined and fundamental relationships between the number and distance of collinear points and corresponding error variances are revealed algebraically. To demonstrate the impact of collinearity, experiments are conducted with covariance propagation analyses, showing significant reduction of the error variances of the estimated parameters.