Decisions, Decisions

The last time I called in to our insurance company, they offered to do an insurance review to see if there was a way for us to save money. When it came to car insurance, they pointed out that I could save quite a bit by dropping comprehensive and collision on my car.

Even if I just drop collision, I could save about $340 per year.

There are all kinds of reasons to go ahead and drop collision, but I’m reluctant to pull the trigger without doing further investigation.

According to KBB, My car is probably worth about $1300. (I could probably get $1500 for it because it is a popular car, but of course the insurance company wouldn’t base the value on that.)

My current deductible is $300, and my current annual car insurance cost is about $1382. (That’s with my newly licensed teenage son listed on the car as well.)

Essentially this means that if we were to hit something, my car would probably be totaled if the repair cost more than $650. The last time someone tapped my car on the bumper, the repair was about $500, so it wouldn’t take much at all for it to be totaled.

LOGIC says that if we can avoid hitting something for 3 years, it’s worth it to drop collision.

Replacing a $1300 car is not a problem for me, but emotionally I feel like dropping the collision coverage is tempting fate. Silly, I know, but there you have it.

Have you made a similar type of decision? How did you handle it?

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16 comments

  • I get only the state requirements for my car insurance. I drive an old truck, so I figure the odds of it being totaled where I can’t drive it at all are very slim. Since I’m saving up for another vehicle, the savings are well worth the risk.

    • Kevin, ah I have more than the state requirements, although not enormously more. Although here at least that has more to do with liability to others. I can always walk if my car is out of commission, so that part isn’t the issue.

  • I know that I wouldn’t drop it. I know people who I’ve never seen sick before since I can recall, and soon as they dropped their health insurance, they were sick. Maybe that had to do with stress from job issues, etc. Or maybe they were thinking too much about “what if I get sick” and kind of willed it to happen. Not sure. I’d rather be safe than sorry.

    • Lenci, there’s no way I’d even CONSIDER dropping health insurance. That’s for sure. Obviously I feel the same way about dropping collision for my car and tempting fate though.

  • Hey Jackie,

    Good question about dropping collision. We were faced with that on one of our vehicles not too long ago and decided to keep it. The vehicle is worth about the same as yours – around $1,200.

    I’m all in favor of saving money, but the breakeven on the saved premiums would’ve been about five years. Where we live and drive, too much can happen in that time, so I figured it would be worth it – if nothing else than to put an insurance payout toward the purchase of another vehicle should something happen.

    Collision premiums have generally decreased in recent years, so it’s pretty important to run that breakeven analysis to make sure you aren’t missing out on a deal to get some cheap coverage.

    Thanks for the question!

    • Derek, yeah I had done the breakeven in the past and it was a no brainer. Before I added my teenage son it would have taken a long time to get to the breakeven point because the insurance was pretty darn cheap. But now it’s down to three years. Still, I think that’s a fairly long period.

  • When I was out of college, I was driving around in an old Honda Accord. The car had tons of life in it, but any type of accident was going to total the car. I dropped collision and just made sure if I was to hit something my insurance would cover the other driver’s damage and any possible hosiptal bills.

    • Kate, that’s basically what I”m considering, although the more I think about it, the more I think I’m just going to stick with the status quo. For another year, at the very least.

  • We drop it once the car value gets below $2500. We got enough cash on hand to make up the difference assuming anything happens (knock on wood).

    Jackie, you got to pull the trigger and cancel comprehensive.

    • Bucksome, hm, I was only considering dropping collision, not comprehensive as well. The reason I didn’t even consider comprehensive is because I have zero-deductible full glass coverage with comprehensive, and there are a LOT of rocks on the road out here. (Although thankfully they finally switched to doing micro chip-sealing instead of regular chip-sealing. People used to call chip-sealing windshield replacement season.) A new windshield would run me quite a bit. It’s worth it to keep it for that part alone.

      • In Houston, 2 foot windshield cracks are repaired for free if you have comp coverage or $50 if you don’t. Ask those guys under the yellow windshield repair umbrellas…I haven’t had to do it yet, but I asked about it when we were having my husband’s windshield repaired.

        • Wow a 2ft window crack is huge, I’m surprised they repair that instead of replacing. But with comprehensive I do also get free repairs if it’s deemed repairable. (Well, free in the sense of no additional charge except what I pay for comprehensive.)

  • I have liability only on my 2005 Aveo and it’s KBB value is about $4600. I only use it as a commuter vehicle and if anything happens to it, we have a car fund for my new car. It’s been liability only for almost 2 years (I changed it over about a year after I paid it off). So far, so good…well, I guess…I hate my car and want a new one but can’t justify the expense until it dies.

  • I would definitely drop collision insurance if you can cover the cost of replacing your car. I’m not sure, however, if an accident leads to medical bills. What does your carrier cover then?