When Should You Drop Collision Coverage On Your Car??

A good rule is 10 percent: If collision coverage costs $200 a year on a $2,000 car, you should consider dropping it and banking the premium toward your next vehicle purchase.

(You can find the premium for your collision coverage itemized on the declarations page of your last renewal notice.)

Do I need collision insurance?

Although collision insurance is not required by law, if you’re buying or leasing a car you’ll typically be required by the lending institution to purchase both collision and comprehensive coverage. When the car loan is paid off, you can decide to keep or drop your collision coverage.

What is comprehensive auto insurance vs collision?

Collision coverage pays for vehicle damage caused by crashes, while comprehensive coverage pays for any other vehicle damage, such as theft or flood damage. You must carry collision and comprehensive car insurance if you have an outstanding auto loan or leased the car.

What happens if you have no collision coverage?

Remember, collision coverage only covers damage to your own car; it won’t provide coverage if you hit another person’s vehicle. However, if the other driver is at fault, their property damage insurance, and not your collision coverage, will pay to repair your car.

Should I drop collision coverage on my car?

Although collision and comprehensive are optional according to state laws, a lender may require a borrower to carry both. Now that you’ve paid off the car, you’re free of that obligation. However, that doesn’t automatically mean dropping the coverage is a good idea. First consider how much the car is worth now.

Do I need collision insurance on an older car?

While you will want comprehensive and collision coverage on your brand-new car , as the miles add up your insurance needs will change. Until the car is paid off, a lender will require that you carry comprehensive and collision coverage. Most drivers would anyway, since the car still has most of its value.

Why is collision insurance so expensive?

Collision coverage pays for damage to your vehicle when YOU cause an accident. If you wreck your own vehicle, your insurer will pay for the cost to repair the vehicle, or if the cost to repair is more than the value of the vehicle, they will pay to replace it based on its market value at the time of the accident.

How much collision coverage should I get?

If you live paycheck to paycheck and can afford the cost of car insurance, it might be worth it to keep collision coverage. A good rule of thumb is if the cost of collision coverage is 25 percent of your vehicles value every six months, it is probably time to stop paying for collision coverage.

What does no collision insurance mean?

Collision also covers the upset of your vehicle, such as the unintentionally rolling or flipping of your vehicle. Your property damage liability coverage does not cover your vehicle in any way; it only covers those that you hit. Collision doesn’t cover any and all damages that your vehicle may receive.

What is collision and comprehensive?

Collision Insurance covers damage to your vehicle in the event of a covered accident involving a collision with another vehicle. Comprehensive car insurance pays for damage to your vehicle caused by covered events such as theft, vandalism or hail, which are not collision-related.

Is hitting a pothole collision or comprehensive?

The good news is, yes, pothole damage is usually covered—provided you have collision coverage. Comprehensive coverage reimburses drivers for theft, vandalism, flooding and damage from fallen objects, such as trees.

Is hitting a deer collision or comprehensive?

When you hit a deer, your claim is filed under comprehensive insurance. But if you swerve to miss a deer and crash, it is a collision claim. Although a deer may have started the chain of events that led you to crash the car, if your vehicle didn’t actually have contact with the animal, it isn’t a comprehensive claim.

Photo in the article by “Public Domain Pictures” https://www.publicdomainpictures.net/en/view-image.php?image=9577&picture=car-accident