What is collision insurance?
Collision insurance covers damage to your vehicle at the expense of someone else, an object, and even rollovers. It covers your vehicle regardless of whos at fault.
Some examples of collision coverage:
- Hitting a tree or telephone pole
- Rolling your car
- Backing into another car
These sound like things that can happen at any time, so why should you consider dropping collision insurance?
Well, collision insurance has a deductible too, which means you will have to pay for some of the initial cost of the damage your vehicle might incur. Sometimes deductibles can be over $1,000!
For example: if your incident costs $2,000 in damage, you are responsible for $1,000 of it.
According to insurance.com:
One of the biggest mistakes people make is not having the coverage. Because it is
almost always the person who cant afford an unexpected expense who decides to
try and save a little money by dropping coverage.
A rule most people and agencies go by: the 10% rule.
What does that mean?
If your car is worth $3,000 and your deductible is $500 and your car is totaled, you will only receive $2,500. If your collision cost is $250 or more a year, its time to drop the collision as its 10% of the cost you will receive for your vehicle if totaled.
When should I keep collision insurance?
- If you have a loan or a lease on your vehicle
- If you only have one vehicle
- If youre worried at all about being hit by an uninsured driver
These are a few reasons you should consider keeping your collision insurance. If you have more questions, ask your insurance agent! They always have your best interests in mind and know whats right for you and your lifestyle.