I’m trying to figure out if I should drop my collision insurance.
My car is a 2012 Toyota in good condition with 33,500 miles on it. The Blue Book says car’s value is about $10-11,000.
Some websites say that a person might want to drop their collision insurance if their premium is more than 10% of the car’s value. I don’t know if that means my total premium or just the collision premium. My total premium is over $1000 (full tort). My deductible is $1000.
I think that probably any damage done to my car would cost hundreds or a thousand or more to fix.
I don’t know who to ask about this. I don’t know if I can trust an insurance salesperson to answer honestly.
Just the collision premium . Seriously do you have 10000.00 just laying around if you total your vehicle or it get several thousands of dollar vandalism . You might lower you annual premium by seeing if you qualify for low annual driving mileage.
If you own your car outright and can afford to replace it if you mess it up, then save your money.
My last two cars, bought with cash at 1 y.o., had collision coverage for a year, then dropped.
Where I am collision coverage just about doubles my rate over liability+comprehensive+uninsured.
Just look at the cost of your collision premium alone. Do not worry about percentages, just decide for yourself if the premium is worth the cost or not paying the premium is worth the risk. To me, it is just a gut feeling as to when it is time to pull the plug.
Most of the time, if you drop collision, they will expect you to drop comprehensive as well. Comp protects you in case of theft, vandalism and acts of nature, like a tree branch falling on your vehicle during a storm. This is pretty low priced because it just doesn’t happen all that often, but you can keep it if you want after dropping Coll.
Just make sure other coverages that you want to keep aren’t dropped as well such as uninsured motorist, medical and roadside assistance if you have those.
I would keep the collision insurance right now especially with the high cost of used cars and new ones getting harder to find. but I would search around and find the rates of other insurance companies. you could probably lower yours by switching. I have done that a few times over the years and have gotten the same coverage for a lot cheaper.
Like others have said, today’s car market is crazy, so old ‘rules of thumb’ may not apply any more. I’d be reluctant to cancel collision if it meant I’d be forced to buy a new(er) replacement at greatly inflated cost.
I’m not going to go look at my statements again but last time I looked, the collision portion was very small. Something like $60 per car for 6 months. Regardless of age, I have just kept the coverage as being not worth it to change policies. So if you pay $200 a year for the coverage and hit a light pole, it would take 50 years of premiums to save the $10,000 payout.
Now on to liability and umbrella policies and house replacement cost etc. No one likes paying for insurance, especially life insurance, but everyone is happy to have it when they have a loss or need a lawyer to represent them.
My comprehensive is only $215 for the year. I guess that’s not much considering what it would pay out if I had a lot of damage to my car and my car still has a pretty high value. I used it once when I was the victim of a hit and run accident.
Don’t confuse comprehensive with collision. They are different but work hand in hand. Comp pays for things like hail, vandalism, etc. Collision pays if you run into a tree (regardless of fault).
I don’t know who you can trust, but I generally don’t deal with people I don’t trust. I usually have gotten a pretty straight answer from my agent because they are able to provide the pro’s and cons, plus have seen the results. We here, are mainly interested in making sure people do not face a calamity that will be hard to recover from. I’ll continue in a second post.
What is beginning to happen now is people are panicking and looking for all ways to save money to survive. We have all been there a number of times before, as have our parents. There are lots of ways to save without shooting yourself in the foot.
Learn DIY skills for the car and around the house. Avoid credit and especially credit cards. Think about trying to use food ingredients rather than buying the processed foods. Back in the old days people would buy bags of beans for example instead of the processed beans. Victory gardens with fruits and vegetables harvested. Not so many trips to the fast food joints. We used to hunt and fish for food. Immigrants still do.
And on and on. Some folks are going to have to shift into survival mode for a while. It can be a learning experience.
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I’d probably keep it on a low mileage 2012. We still have it on our 2013, I think. I’ve got two 2005 model vehicles that I do not carry collision on. They are $3-5k vehicles (normally) that I can afford to replace so I don’t want to needlessly spend any extra insurance money on them each year. I’d rather take the gamble on just having to replace those two.
The general rule is that you should only buy insurance if you would not be able to pay for the loss. The insurance company is making a profit, and you can avoid paying that when you drop coverage. Thus, I carry health insurance, but I reject collision on a $10000 car, because I can afford it, even if I don’t like forking it over. Similarly, I keep high limits on the liability portion.
However, lots of people buy more because they want to avoid the pain of a large repair cost. They sleep better at night, even if the logic is ignored.
+1
Additionally, the OP should bear in mind that collision coverage is not an “all or nothing” situation. Several years ago, I increased the deductible on my collision coverage to $1,500, and I now pay only $154 annually for the collision portion of my car insurance.
I wanted to increase the deductible to $2,000, but my ins. company wouldn’t agree to that request, so I went with the $1,500 deductible. Perhaps the OP’s ins. company would allow him to increase the deductible to $2k–or more.
