When do I drop collision insurance? Truck is 15 yrs old. I’d rate it in the higher side of the “good” category in terms of its condition, conservatively. In actuality it’s probably in the lower side of the “very good” category. Minor issues with the body but runs like a champ. I live in a city notorious for bad drivers and uninsured motorists, which is the reason I’ve kept the coverage so long.

Do you keep collision? When does it not make sense to have it? I know it’s all a big gamble and just feel if I were to drop it, Murphy’s law would probably smack me in the face, but I could use the extra money.

Is there a ratio of the vehicle value vs. cost that makes sense?

Thanks,

CT

What's your 15 year old truck worth? How much is your premium? How much is it with liability and uninsured coverage?

You just need to take the value of the truck subtract the deductible so you have an idea of what the payout would be if totaled.

Then take the premium charge for collision and divide the value less the deductible. That will tell you how many policy periods (depends on how often you pay; monthly, biannual or annual) it will take for you to pay the trucks value in premium.

Once you have that number, you can decide for yourself.

Can you live without the truck or afford to replace it immediately if you lose it to a situation that would be covered by your collision coverage?

If so I would drop it for sure and more or less self insure.

quote:

Originally posted by Scurvy:
You just need to take the value of the truck subtract the deductible so you have an idea of what the payout would be if totaled.

Then take the premium charge for collision and divide the value less the deductible. That will tell you how many policy periods (depends on how often you pay; monthly, biannual or annual) it will take for you to pay the trucks value in premium.

Once you have that number, you can decide for yourself.

I would also factor in available funds and driving history. We went to $1000 deductibles years ago when we realized that:

1) We have the $1000 available.
2) The premium savings pay for the difference in the higher deductible every 18 months.
3) In a combined 35+ years of driving (including me driving for a living for 17) that we've never had an at-fault crash.

So it was worth it to us to take a slightly riskier position with the deductible. We've probably saved a couple thousand dollars.

Regarding the initial question and advice from Scurvy, when we changed deductibles, my wife was driving an older car that we chose to also drop full coverage under similar logic. That car ended up being totaled when she was rear-ended by a cement truck. It really validated the approach for us.

quote:

Originally posted by DaBigBR:

I would also factor in available funds and driving history. We went to $1000 deductibles years ago when we realized that:

1) We have the $1000 available.
2) The premium savings pay for the difference in the higher deductible every 18 months.

I have 100 collision and 0 for my other deductible that the name is escaping me at the moment.
If I go to a 1000 collision deductible and 500 it would take me 8.5 years in premium savings to make the 900 extra needed to have the $1k on hand.

When my Explorer was my 2nd vehicle and rarely driven it was $20 a month more for collision. So it was silly to drop it.

I've noticed that the self-help financial gurus always tend to roll out this idea of dropping collision insurance whenever we enter a recession as one of the ways to quickly lower your living expenses.

My take on this is that if the amount of money you would save by dropping collision is really going to make a difference to you, then you probably can't afford to replace your vehicle outright or pay for a costly repair if you are involved in an accident that is your fault. Therefore you should keep your collision insurance.

Not sure if your state has it but there is a middle ground which is no collision if it’s your fault and collision with no deductible if it’s someone else’s fault. I grew up in the Upper Midwest with a father in auto body and it’s what I had ages 16 - 25 (drove low mileage, older vehicles that dad and I fixed up). I moved to Texas at age 25 and switched to driving newer vehicles so I have full collision.

I saved a bunch of money doing it and was fortunate that I was only hit once (definitely not my fault since I was indoors and some moron ran into it in front of 6 of my coworkers).

A factor to consider which I don't know if it's really important to anybody's experience other than mine is this: If you get into an accident that the outcome may be dependent upon if it's your fault or not, if your company may incur a payout may alter the outcome. Your company may fight for you if they may have to pay, but they'll lay down if they don't have to pay, possibly altering the image of your culpability.

I personally keep full coverage insurance on any vehicle I own that becomes paid off. My truck is 19 years old. One year ago a deer jumped across the road into my truck. The damage was $6,000 worth and just a few hundred under what blue book says it is worth. I only paid $250 to get it fixed back to new and it was not considered totaled. If I didn’t have insurance, I never would have paid to fix it.

Check to see what the cost saving are. I checked mine one time and the savings came to 36 dollars a year. Made more sense to me to keep the collision, if the car were totaled in an accident I would collect a lot more than that puny savings would yield.

quote:

Originally posted by Scooter123:
Check to see what the cost saving are. I checked mine one time and the savings came to 36 dollars a year. Made more sense to me to keep the collision, if the car were totaled in an accident I would collect a lot more than that puny savings would yield.

THIS

I kept running the numbers for an old Honda I still drive and could not get it to work. Drop the collision to save 25 bucks a month and next week I hit a deer and total the car and don’t get the $3,000 or so I’d be getting had I kept collision? Yeah, I’ll keep it.

I can almost always justify upping the deductible on collision coverage for older vehicles to save a bit of money. But dropping coverage completely has never made practical sense to me. It's been over four decades since my last at-fault crash (not counting on-track; there was after all a legit reason why I called myself "soggy_spinout" with my previous account callsign), but shit happens even to the best of us. I figure that I don't want to take a complete loss if I do wind up causing an accident. Hell, after all of the years of paying INTO my insurance company's coffers when the protection felt absolutely necessary and the only reward was some nebulous "peace of mind", I can't help but feel some measure of entitlement to get something back out of sheer principle, even if I'm the schmuck who's the cause of the mess.

-MG

I recognize the value in insurance is to prevent disruption to my finances. I recognize that I pay for that benefit. If the value of my car drops to the point where its total loss isn't a disruption to my long term finances, then I stop paying for collision coverage. I do not believe in paying for unnecessary or unwanted benefits, however small the cost.

I suspect options and price differences vary quite a bit by state, too.

I say keep it.

If you have an umbrella policy you have to keep full coverage on vehicles.
It's a rip but insurance is like gambling.