When Should You Drop Collision Coverage?

Your auto insurance policy is split up into several types of coverage, of which you may have some flexibility in choosing the options you wish to purchase. For example, your state will require that you buy liability coverage, but collision coverage may be optional. And because many people look for ways to cut back on monthly expenses, you may decide to drop optional coverages. But is dropping collision coverage the right decision?

What is Collision Coverage?

While liability coverage is designed to cover the expenses of other drivers that are your responsibility, collision coverage is designed to protect your own vehicle. If your car is damaged in an accident—whether colliding with another vehicle, an animal or a stationary object like a building—collision coverage can fund the cost of repairs, after you pay a deductible (according to policy details).

It’s important to note that collision coverage only covers collisions. Other damages to your car—like flooding or weather damage—will most likely be covered under your comprehensive collision.

Should You Drop Collision Coverage?

It’s recommended that most people carry collision coverage because car repairs can easily climb into the thousands, a sum that many people may not have lying around. For this reason, most car lenders will actually require you to carry collision coverage while you’re paying off your car loan.

However, you may decide that dropping this coverage is the right thing to do under certain circumstances. For instance, if you have an old car, it may cost more to repair than the vehicle is worth. In that case, collision coverage may not serve you as well as if you needed repairs on a younger vehicle.

Are you wondering if collision coverage is right for you? Talk to your independent insurance agent for a personalized assessment of your needs and risks. The decision is ultimately up to you, but it helps to get the information you need to make an educated decision.