Should you Cut your Collision Insurance

With the expense of car insurance you may be looking for ways to cut your premiums. There are pros and cons to consider about collision insurance. 

Most states require you to have at least liability coverage. Liability coverage protects you and other drivers in the event you cause an accident resulting in injury or damage to the other parties involved. If you have your car financed, many times, your lender will require you to have full coverage on the vehicle at least until the loan is paid off.

Cutting collision insurance or comprehensive coverage is one way people save money when their car is not worth much. One rule of thumb is if the annual cost of insurance is more than 10 percent of your car’s value, you could consider eliminating the coverage.

You need to take into consideration how much money you would have saved to pay for major expenses if you were in an accident. By spending a little more each month for collision insurance will save you from major bills in the event of an accident. 

It is especially important to have collision insurance if you only have one vehicle.  If you have more than one vehicle, then you would have a backup. However, with only one vehicle, you would need to rent a car when yours is getting repaired.

There are other options you can cut from your coverage instead of cutting collision insurance. Some of these options are roadside assistance, rental car reimbursement or towing. But when you cut these services, you need to be prepared in the event of an event or accident.

Do you have friends or family that could help you out if your car doesn’t start or you have an accident? If you don’t have anyone to help you, it may be worth the extra cost of having this coverage. The small amount you would save each month would be negated if you ended up having to pay for these expenses out of pocket at a later date. 

Instead of cutting these options, you may be able to save money on your insurance premiums by changing the amount of coverage on your liability coverage. Although, on the other hand this increases your share of the burden if you are in a serious accident. 

There are pros and cons to consider having collision insurance on your vehicles.  Cutting collision insurance may lower your premiums but can increase your burden in the event of an accident.