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5 Ways To Tell If You Should Drop Your Collision Coverage

collision insuranceOwning collision insurance means that if you are in an accident, your insurance provider will reimburse you for any damage to your vehicle if the collision is deemed to be your fault.

It may seem reasonable that everyone should have collision coverage, considering there are an average of six million car accidents in the United States each year. However, the benefits of collision insurance may not outweigh the cost you’d have to pay. It all depends on your particular situation.

Contemplate these five considerations to help you determine if collision insurance is right for you:

  1. Did you finance your vehicle?
    If you acquired an auto loan to pay for your car or truck, you are required to secure comprehensive and collision coverage.
  1. How often do you drive?
    If you don’t drive your automobile on a regular basis, you surely have less risk of getting into an accident. The less time you spend on the road, the less likely it is that you’ll need collision coverage.
  1. How much is your vehicle worth?
    Before dropping your collision insurance, you should first do a little research and a bit of math. First, find out how much your car or truck is worth. Then, determine know you are paying for your collision deductible. Now, compare the two numbers. If your collision deductible is $500 and your vehicle is worth $1,000, you would be reimbursed what you paid for the year if you are at fault for an accident. 
  1. What can you afford?
    Could you afford to pay for a new vehicle out of your pocket should you get into an accident that’s your fault? If the answer is “no,” you should probably keep your collision insurance as part of your policy.
  1. Will you be “at fault?
    This is the murkiest of questions, but if an accident is not your fault, then the other driver’s insurance company will pay for the damages done to your vehicle. Deciding not to obtain collision coverage because you believe you won’t be at fault is risky. The whole point of insurance is to mitigate risk.

Most drivers are better off with a collision deductible. It will limit how much you’ll have to pay in the event of an accident that is found to be your fault. Not every driver must have this benefit. Carefully consider the above questions and make the best decision for you. The goal is not to sell more insurance, it is to sell you the right insurance. Keep this in mind when talking with insurance agents.

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