Drop Collision Insurance


Collision Car Insurance is insurance which promises to pay out a specific amount of money in the event of your car being involved in an accident. The total amount that the insurance companies will pay is calculated by deducting the overall value of your car from the deductible you have agreed to pay yourself. And so when it comes to deciding whether or not to drop your Collision Car Insurance there are a few important factors which you must first consider.

Firstly, what is the total value of your car? If your annual fee is 10% or above of your vehicles total value then you should consider dropping your Collision Car Insurance. Also, if your car is aged 5 years or older then there is a high chance that its value has decreased to such an extent that the insurance company will refuse to payout, even if it is involved in a collision. In both of these scenarios there is no need to continue paying for your Collision Car Insurance since you are not going to benefit from it in the long term. On the other hand if you borrowed money to finance the purchase of your car then you are probably required by the lenders to keep the Collision Car Insurance, regardless of its overall worth. In this case you must first pay off the loan, before cancelling the Collision Car Insurance.

The next most important factor to take into consideration is your driving record. If you have had your car for a few years and have not yet crashed, or been involved in a crash, then it is likely you will continue to be safe and so do not need the insurance. But, if you do chose to cancel the insurance under these terms it is advisable that you place some of the money you save into a savings account. This means that even if you are unlucky enough to be involved in a crash after you have cancelled the coverage, you will be able to cover the cost of the repairs without having to cut back on other essentials.

Ultimately, it is this question of whether or not you can cover the costs of the repairs yourself, which the single most important factor when deciding whether to drop your Collision Car Insurance. If you are living hand to mouth on a daily basis, then losing or repairing your car yourself could throw your life into chaos, and so cancelling your policy would not advised. On the other hand if you are living comfortably, or could quite easily live without the car for a few days in the event of a crash, then you will be able to cancel the policy without fear, and may even benefit from the savings in the long term.