When Should You Drop Collision Insurance on Your Car?

Road accidents or collisions can happen at any time. In such situations, having collision insurance coverage can help cover the damages and repairs. However, some people may think about whether it is worth paying for collision auto insurance. Let’s find out.

What Is Collision Insurance?

It covers car damages caused due to collision with another vehicle or object, including rollovers. Irrespective of who is at fault for the incident, it will pay for the damages caused to your vehicle. It includes damage and repairs caused due to man-made mistakes, such as hitting a telephone pole or tree on the road, colliding with a building, or hitting a pothole or curb.

Comprehensive auto insurance coverage is helpful in the event of natural disasters such as landslide, flood, or cyclone.

When Should You Drop Your Collision Insurance?

Here are a few instances you can consider dropping your collision insurance.

  • If your premium exceeds 10% of your car’s value, you can drop your collision coverage.
  • If your car becomes older and you want to buy a new one, you can drop your collision coverage and use that money to buy a new car.
  • If the market value for your vehicle is lower than the deductible on your collision insurance, it will be better to drop it. For example, if your totaled car’s worth is $850 and your deductible is $1000, you would end up paying for the damages.

Just because collision coverage is not legally mandated does not mean you do not need this. It is important to cover the damages resulting from accidents and collisions.

Based on your needs and budget, you can decide whether to have collision coverage. For assistance with all your auto insurance needs and questions, contact the experts at Miller Carlisle Insurance Services in Carlisle, PA. We help you get the right coverage you need.

When Should You Drop Collision Insurance on a Car?

At some point, when you have an older vehicle, you might be thinking it’s time to drop collision coverage from your auto insurance policy. There are many reasons why people make this decision, and sometimes, it is best for you.

 

Collision auto insurance covers damage to your vehicle caused by contact with another vehicle or object, including rollovers. Your collision coverage in your policy will cover your vehicle regardless of who is at fault for the damage. Whether you hit a tree, collide with a building, or back into another car, this type of coverage can step in to help.

 

Most insurers recommend dropping your comprehensive coverage when your car’s value diminishes to the point that you cannot buy much coverage. However, you should always consider the effect the complete destruction or disappearance of your vehicle might have. For example, if you use your car daily to get to work, and your financial position would not allow you to purchase a replacement vehicle right away, then keeping coverage could be a wise choice.

 

If your vehicle is older, it might be time to drop comprehensive and collision coverage and put the money you are saving into an account to buy a new car when your current one can no longer go on.

 

Keep in mind that this is unique for each person and situation. For example: If your car is worth $3,000 and you have a $500 deductible, your potential payout would only be $2,500 if your car was totaled and you placed a collision claim. Using the 10 percent rule, if your collision and comprehensive premiums cost $250 or more a year, it is time to consider dropping the coverage.

 

Too many people drop coverage too early in their vehicle’s life, however. Talk to your insurer about this coverage and ways to save on your auto insurance. Do you have additional questions about your car coverage? Contact the experts at Miller Carlisle Insurance Services. Our dedicated team is eager to assist you with all your auto insurance needs today.