McKayla Girardin, Car Insurance Writer
@mckayla_girardin
Collision insurance is worth it if you would otherwise be unable to afford to replace your car after an accident or if you often drive in areas where the likelihood of an accident is high. Collision insurance can provide valuable coverage if you're at-fault for an accident, and it is often required for financed cars.
When Collision Insurance Is Worth It
- You cannot afford to repair or replace your car after an accident or would rather avoid spending your savings on it.
- You have a loan or lease and are required to have collision coverage.
- You have a history of at-fault accidents.
- You drive in accident-prone areas.
When Collision Insurance Is Not Worth It
If you have a lot of savings and could afford the repairs or replacement if your vehicle is damaged, you might be able to skip collision insurance. Additionally, once your annual collision premium is equal to 10% of your car’s value, you’re probably safe to drop the coverage, since you’ll likely spend more in the long run than the repairs would cost.
Lastly, unless your loan or lease requires it, carrying collision insurance is not mandatory. If you have an older car or don’t drive much, dropping collision coverage could help lower your premiums.
To learn more, check out WalletHub’s guide to collision insurance.
People also ask
When should I drop collision insurance?
You should drop your collision insurance when your annual premium equals 10% of your car's value. If your collision insurance costs $100 total per year, for example, drop the coverage when your car is worth $1,000 since, at that point, your insurance payments are too close to your car's value to be worthwhile. Drivers can easily find a car’s value with the online vehicle appraisal calculators from Edmunds or Kelly Blue Book.
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If you have no collision insurance, your vehicle will have no coverage under your car insurance policy if you cause an accident. When you’re at-fault for an accident and do not have collision insurance, you must pay out of pocket to repair or replace your own vehicle. Collision insurance usually is not needed if the other driver is at-fault, since their liability insurance will pay for damage to your car.
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read full answerIs it better to have comprehensive or collision?
It is better to have comprehensive insurance than collision insurance, if you need to choose between the two. Comprehensive coverage is inexpensive, can be purchased alone, and pays for damage due to events beyond your control, such as vandalism, theft, natural disasters or run-ins with animals.
On the other hand, drivers with a history of accidents or moving violations and drivers who live in high traffic areas should consider investing in collision insurance. Given that collision...
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