When is the right time to just drop it? Make the most of the cash you have and ride into an inexpensive auto insurance policy. First, let’s define collision coverage. Collision Coverage is simple, it covers you when collide with something. For example, you accidentally bump the rear end of the vehicle in front of you. Your Insurance provider will pay for the damages to the owner of the vehicle you have collided with. Now that we have clearly defined collision coverage should we drop it from our insurance policy? First we need to determine how much this will save us on our insurance premiums.You may find more information at JC Auto Collision.
So, let’s begin investigating if it’s time to drop it. First, determine how old your car is and it is also best to find out the actual value of your car. This is very important to know because the collision coverage amount is 10% of the actual amount of your car in most cases. If you need to have an estimator to do this for you then go ahead. Be as accurate as possible to maximize this coverage. Once you get your facts straight, you may find that your 20 year old Pinto or that old rust bucket is not going to be worth keeping collision insurance on. Next, ask yourself if you can afford to pay the replacement cost of your older vehicle. If your vehicle is worth less than your yearly insurance premium then you would certainly be better off to cancel your collision insurance. Now there is some risk involved, but if you are prepared to take it and you know that your financial situation is in tip top shape, then you are ready to make that decision and the journey to finding inexpensive auto insurance has just gotten easier.
You may also want to consider your accident-free history, the better your record is, the less risks involved on dropping your collision coverage. The last thing you need to do is to determine if you have an existing loan on your car. If you owe money against your car then you are required to keep collision coverage until you have paid the loan in full. Once you have determined all four of these important factors then you are ready to drop your collision coverage. Annual collision coverage is normally 20% or even more of your actual car value. That is how much you may be able to save when you drop the collision coverage on your auto insurance.