Collision Coverage: When is it Worth it?

Many of us hang on to things long after they are useful. Whether it’s that old team jersey we used to wear every Friday, that busted electronic device we’re going to have fixed “one day,” or that box of old school reports, we have a hard time letting go. The same can be said of car insurance and how much you actually need.

Perhaps you have finally paid off the loan on your vehicle and after a year of not making car payments, you simply kept the comprehensive coverage out of habit. Most lenders require you to carry full coverage on a vehicle if you are still making payments. In any case, it’s important to review your car insurance policies every few years or so to be sure you’re carrying sufficient coverage – and to identify whether you are perhaps carrying too much.

For vehicles worth $5,000 or less, collision coverage may not make sense. First, even with full coverage, you still have to pay the deductible. Check the Kelley Blue Book value of your vehicle every year to calculate the necessity of collision coverage. If your $3,000 car is damaged and needs $1,500 in repairs, with a $1,000 deductible the value of insurance is only $500. That’s probably less than you pay in premiums with collision coverage and you’d be better off dropping it and starting a car repair savings account.

The other part of the equation is your accident history. If you have a fairly clean driving record and aren’t in the habit of causing accidents, collision coverage on a less valuable vehicle is probably not necessary. However, if you are a little accident-prone like some of us, you have to make that value judgment.

We can help identify your car insurance needs. Our agents do not work for any one insurance company, so they aren’t interested in selling you more coverage than you actually need. We will find you a number of quotes from a variety of insurance providers, ensuring you will find coverage you truly need at the best rates.