Why Should You Drop Collision Car Insurance on Your Old Vehicle?

If you own and drive an older vehicle and you still have collision coverage, then don’t be surprised when you will be advised to drop collision coverage to save money. Before you drop collision coverage, you need to know what benefits are you losing.

Full coverage insurance has collision and comprehensive coverage. Comprehensive coverage protects your car from damages caused by severe weather, theft, fire, vandalism, and animal collision. Collision insurance covers the damage your vehicle suffered in an at-fault accident, a rollover, a collision with an inanimate object (pole, fence, etc.), or when you are in a dispute with who is at fault. You can visit our website to find out more info about collision coverage and to get free online car insurance quotes.

Before dropping collision coverage, consider the following:

• The value of your vehicle.  The insurance covers the market value of a vehicle. Many older vehicles are still valuable. You should look for sites that list the market value of vehicles and then compare different market values. Sites like Edmunds, or Kelley Blue Book are ideal for doing that. After you got the market value of your vehicle, then you can compare that value with the annual collision and comprehensive insurance costs. Usually, if ten full coverage payments are higher than the market value of a vehicle, then you should drop coverage. With the money you save, you should start a savings account and use the money if something bad happens to your car.
• Your saving ability. Many believe that is easy to take the savings done on collision insurance and put them away in a savings account. If you are bad at savings, then there are many chances that you won’t put away that extra money on a savings’ account. In a car accident, you are required to pay for the damage done to your vehicle, so if you have poor savings abilities it is better to keep collision coverage.
• Your miles. Usually, drivers experience one accident every 165,000 miles. If you are driving a lot, and especially in a city, where car accidents are more likely to happen, then you should consider keeping collision car insurance in place. Also, if your vehicle suffered minor damages that cost only a few hundred dollars, and your vehicle is worth more than $4,000, then keeping collision coverage might prove beneficial.

In the end, the decision is yours. After you compare your vehicle’s market value with the costs of insurance and the chances for a collision to happen, you can decide if dropping collision coverage is beneficial for you.

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