When Should You Drop Collision Coverage on Your Car?

| April 11, 2016

A question many clients have is ” When should I drop my collision coverage on my auto insurance?” “Does it matter how much my car is worth?” There is no set year or value to making this decision, but let’s discuss!

If you have a newer vehicle, we recommend you having collision coverage! You can also look at your vehicle’s actual cash value and this can help you determine when to get rid of coverage. We usually look at Kelly Blue Book for values. You should also look at what the collision coverage is costing you ANNUALLY. Is the cost worth what you would get back in the event of an accident? If example, if you car is worth $2,500 and your collision premium is over $500 for the year, you are paying 20% of your car’s value for collision coverage. Does that make sense? You also need to think about how much you can afford to pay out of pocket for your car in the event of an accident. Maybe you do need the coverage if you are living pay check to pay check…

These are questions we can discuss with you to decide if you want the collision coverage on your policy. Call us at 818-223-8383.