Are you thinking of removing collision from your auto insurance? As your car ages, you may not need collision insurance, or maybe you’re just looking to switch to a cheaper plan. There are many factors you should consider before making any decisions that change your insurance plan.
What does collision coverage do?
Collision coverage pays to repair or replace your vehicle when you hit another object – another vehicle, a lamp post in a parking lot, even if you slide off the road in the middle of winter and hit a tree. If you are involved in an accident with another vehicle, collision coverage will apply regardless of which driver is responsible. If you have a loan on your vehicle, you will likely be required to carry collision coverage for the life of the loan, as well as comprehensive coverage.
What is comprehensive coverage? Comprehensive coverage covers damage to your car that isn’t the result of an accident, things like vandalism, natural disasters, or hitting an animal. Both comprehensive and collision coverage require a deductible, meaning they will only pay over a certain amount and will only pay as much as the car was worth before the damage.
There are different forms of liability coverage, but they usually come in one or both ways as part of an insurance plan: bodily injury liability and property damage liability.
- Bodily injury liability will pay for medical expenses and other miscellaneous expenses when you or your car is involved in an accident that harms or kills another person.
- Property damage liability pays for the damage to any other person’s property that is caused by you or your car.
So, collision insurance is exactly that – it covers the damage to your vehicle as a result of a collision, regardless of which driver is responsible.
Should I keep my collision coverage?
There’s no set rule or time for when you could drop your collision coverage, so many car owners are left confused as to what they should do.
Having an old vehicle is one of the main reasons people look to drop their collision insurance. If you are paying more for the insurance than what you think your car is worth or if you are paying more than what it would take to replace it, you might consider dropping the insurance. Many experts say that you should look at coverage vs. replacement costs, and the rule to go by is 10 percent: if collision coverage costs you 10% of what your car is worth, you might want to consider dropping it.
Another reason for dropping collision from your policy is if you’re a good driver and have never been in an accident, maybe collision insurance isn’t the right choice for you. This decision is made personally by each driver depending on the risk they are willing to take.
The decision to keep or get rid of your collision coverage is a personal one. You shouldn’t let what others say dictate what you do with your money or insurance. Instead, do the research, ask your insurance agent, & crunch the numbers to make the best decision that fits you and your needs.
Still have questions? Contact our auto insurance experts at Doyle & Ogden Insurance Advisors today! 616-949-9000 or info@doyle-ogden.com . We are the “Single Source Solution” for all your insurance needs.
