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Collision coverage, it is exactly what it sounds like. This type of insurance coverage will cover the losses you may incur if you are in a car accident. Therefore, when it comes to paying for the damages to a car, which can often exceed the cost of your deductible, it may be necessary to have collision coverage.
However, many times people wonder if having collision coverage is necessary for their type of vehicle. Taking collision coverage off your insurance plan can save you a good amount of money on your premium. A good rule of thumb for collision coverage is if your car is relatively new or worth more than couple thousand dollars—you should have coverage.
Here are some other things to think about when you are debating whether to have collision coverage on your vehicle.
• If your vehicle is worth less than about $2,000—you may want to consider paying out of pocket for the damages that may happen to your car.
• If you do have a loan on your vehicle, most lenders will require that you have collision coverage on your vehicle.
• Most vehicles depreciate over time, in 3-5 years you may want to drop your coverage based on your vehicles worth.
• You may want to drop your collision coverage if you drive very infrequently, like less than 2,000 miles a year. You are at less of a risk to get in an accident if you do not drive your car very regularly.
• You can use Kelly Blue Book to research your cars estimated value—this will help you make a decision on whether to keep collision coverage on your vehicle.
If you have any additional questions on collision coverage, or what may be the right coverages for your vehicle, you can give your local agent at Community Insurance a call today. We would be happy to assist you with any insurance related questions you may have.