- TEN PERCENT<\/strong> –<\/span> When collision coverage costs more than 10%<\/strong>\u00a0of the book value<\/a> of your vehicle plus your collision deductible. \u00a0For example, if the book value of your vehicle is $3,000 and your collision deductible is $500, consider removing collision coverage if it costs more than $350 per year for that vehicle.<\/li>
- TEN YEARS<\/strong> – <\/span>If your vehicle is more than 10 years old, it may no longer have enough value to warrant insuring.<\/li>
- TEN TIMES<\/strong> –<\/span> If you have 10 times your collision premium in a “rainy day fund”, you probably have enough of a cushion to put a sizable down payment on a replacement vehicle. If you pay $350 a year for collision insurance and your “rainy day fund” has at least $3500 in it, you might reasonably risk dropping collision coverage. If you don’t have that much saved, you would probably need the insurance proceeds to help you make a down payment on another vehicle.<\/li><\/ul>\n\n\n\n
The Risk of Removing Collision<\/strong><\/h2>\n\n\n\n
If another driver hits you and is at fault, their insurance should pay to fix your car – even if you don’t have collision coverage. But remember that fault can be disputed, and not everyone has insurance.<\/p>\n\n\n\n
If you remove collision, you’d have no coverage for things like:<\/p>\n\n\n\n
- Hitting someone when you are at fault – or partly<\/strong> at fault<\/li>
- Someone hits your car, and is at fault, but doesn’t have insurance<\/li>
- Someone hits your parked car and doesn’t leave a note<\/li>
- Running over debris in the road and damaging your car.<\/li><\/ul>\n\n\n\n
When Should You Keep Collision Coverage?<\/h2>\n\n\n\n
There are some times when you should definitely NOT drop collision coverage:<\/h4>\n\n\n\n
- You have a loan or lease on the vehicle.<\/span> Your loan or lease contract requires you to carry collision coverage for the length of the agreement.<\/li>
- You have only one vehicle.<\/span> Most multi-car families can limp by on one car while one is in the body shop. But, if you’re a 1-car household, you’ll probably want coverage to rent another while yours is being repaired. Also, you’ll definitely\u00a0need to buy rental car insurance\u00a0on vacation<\/a>\u00a0if you don’t have collision coverage on at least one vehicle on your policy.<\/li>
- You’re worried about being hit by an uninsured driver.<\/span> \u00a0If you have no collision coverage, someone hits you and it’s their fault, their insurance will pay. But, what if you are\u00a0hit by an uninsured driver<\/a>? Obviously, there’s no one else to pay; if you don’t have collision coverage, you’re on your own to repair your vehicle. \u00a0
Maine’s ratio of uninsured drivers is 4%. That’s among the lowest in the country. But, we’re also inundated with drivers “from away” during tourist season. Other states have many more uninsured drivers.<\/li><\/ul>\n\n\n\n
\n\n\n\nRelated Post: “Someone Hit My Parked Car!”<\/h4>\n\n\n\n
\n\n\n\nAs you can see, there is no single answer to the question of when to insure collision or not. It depends on the vehicle, your financial situation, the cost of your coverage, and your own risk tolerance. <\/p>\n\n\n\n
Questions about Maine Auto Insurance?<\/h2>\n\n\n\n
- You have only one vehicle.<\/span> Most multi-car families can limp by on one car while one is in the body shop. But, if you’re a 1-car household, you’ll probably want coverage to rent another while yours is being repaired. Also, you’ll definitely\u00a0need to buy rental car insurance\u00a0on vacation<\/a>\u00a0if you don’t have collision coverage on at least one vehicle on your policy.<\/li>
- TEN YEARS<\/strong> – <\/span>If your vehicle is more than 10 years old, it may no longer have enough value to warrant insuring.<\/li>
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