car insurance, collision coverage (driving record, German, van, credit)

[diddiyo]

hi all,

at what point (if at all) should you drop the collision coverage for a car? i'm not talking about a porsche, ferrari etc, just about regular cars. it usually saves a LOT of money, and in my opinion there's no reason to have collision coverage for a 1995 model for example.

but what about a 2002 model for example? for example, it would save me more than $100 a month if i dropped the collision. somewhere i read that it makes sense to think about dropping the collision coverage when the car turns five years old.

would do you guys think?

[sanspeur]

$100 per month? Wow that's a lot. I only carry the full package including collision on my new car, and take my chances with basic insurance and comprehensive the other two. I do increase the liability to 3 million though.

It doesn't make sense to me to pay an extra $1,200 a year for a car that's not worth very much.

[M3 Mitch]

You need to look at what you are paying for the insurance vs what they would pay out if the car was totalled. For most models, depending on many things, somewhere around the 5 to 7 year old point, collision does not make much sense.

I have seen people pay enough in insurance in a year to buy a spare, similar car.

Do check the blue book value of the car you are thinking about.

If you can afford to replace it out of your own funds, drop the insurance. If you have several cars and if one were destroyed you could just go to another one, you don't need collision. IMHO.

[brokencrayola]

Let's put it this way, if you total your car can you afford to replace it? Insurance will pay you nothing. Is it more cotly to pay the extra for collision or what it would cost a year to replace your car should you total it? We have an old van that we'd be lucky to get $1,000 for so we dropped it and carry only liability. Our second car is a 2004 Suburban so obviously we would not even consider dropping collision on it.

[golfgod]

Cars are like anything else that can be insured. Only insure against losses that you can't cover. On our house we have 3% deductible, so we're covered if it burns to the ground, or someon gets hurt. But even a hail damaged roof is on me. I can stand that though as it saves me close to $800/year.

I never had collision insurance on a car until I was about 40 years old and had "nicer" (more expensive) cars. Our oldest car is only worth about $15K, but the collision insurance is very cheap on it so I keep it. If it went up to $500/year I'd probably drop it.

golfgod

[diddiyo]

thanks for all the answers.

if i would get collision coverage i'd be paying $280 a month (!!) for a 2002 mazda protege5 that's worth about $5.000 - $8.000...

i have a clean driving record, the thing is that since i've been working in the US for only about half a year now (i'm german), i have pretty much no credit history which pushes my insurance up a lot. i'm only 24 yo (turning 25 next february) which of course also contributes a lot. oh and of course, miami has the worst drivers and therefore the highest rates anyway

even the agent at the insurance company was like "woah... 280 bucks?!" lol

[Drover]

I guess it depends a lot on your risk tolerance and your ability to absorb a $5,000 to $8,000 loss. Of course, if you don't own the car outright, you don't really have a choice.

An option to consider is trading it for a cheaper car that wouldn't be as big a hit on your wallet if it were a total loss and only carry liability on it; but the extra maintenance risks may not be worth the insurance savings.

[studedude]

If you owe money on the car you are required by financial institute to keep it insured. If it's paid for I have always gone this wise advice, given me years ago. Never insure anything you can afford to replace.

[01Snake]

What deductible is being used to bring your collision coverage to $280?

Is this with All-State by any chance?

[babbawabba]

I have a 2004 corolla. Last year my husband said to drop collision, whihc i decided not to do. three hours later he was in a car accident and the front end was totally. good think i didnt drop the coverage because everything was covered. i woul dnot have been able to afford the repairs on my own. Karma.