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Auto Collision Insurance
Old 05-18-2016, 07:13 PM   #1
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Auto Collision Insurance

At some point in your vehicle's life do you cancel your collision insurance? It is pretty expensive to keep once your car is paid off. I cancelled it on my 12 year old truck and the savings were enough to pay my 1 M umbrella insurance premium. I have never had an agent suggest to cancel it, but just curious what others do.
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Old 05-18-2016, 07:30 PM   #2
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I usually drop the coverage by the time the car is eight years old, but the timing depends on the value of the vehicle.
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Old 05-18-2016, 07:56 PM   #3
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When times were tight (e.g. teenage drivers, tuition, etc.) we dropped collision coverage and we had one car totaled in a no-fault collision. My savings were probably quite a bit less than the loss. Now we have collision on all our cars which runs less than $200/year per car but they are very old and not very valuable. It just depends on whether you are OK with paying to repair or writing off the loss.
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Old 05-18-2016, 08:00 PM   #4
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I drop collision after 2 years. Even that has been a waste as I've never needed it.
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Old 05-18-2016, 08:05 PM   #5
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Whenever you're willing to self-insure.
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Old 05-18-2016, 09:44 PM   #6
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If you decide to drop comprehensive/collision insurance, this likely applies to rental cars as well. You may want this coverage on rentals so either use a credit card that provides insurance or buy extra when you rent.


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Old 05-18-2016, 09:59 PM   #7
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I agree with RunningBum, when you feel OK to self-insure. For me it is probably around the $5000 value point as I think that is when the savings can be more over long term vs the premiums.
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Old 05-19-2016, 07:34 AM   #8
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Depends on the state. In Michigan, if you have no collision insurance and some jackass smashes into your car, the maximum you get is $500.
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Old 05-19-2016, 08:08 AM   #9
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I agree with RunningBum, when you feel OK to self-insure. For me it is probably around the $5000 value point as I think that is when the savings can be more over long term vs the premiums.
+1 on this line of thought. I am also thinking about the $5000 mark. I *could* afford to spend more, but I would prefer not to. My thinking is that bad things tend to happen in 3s, so if I have to replace a car at a cost of say $9000, I can almost guarantee that I will also have a tree fall on the house and one of our furry companions will get very sick. That's just how it rolls...so my risk level is $5000.
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Old 05-19-2016, 08:15 AM   #10
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I cancelled coverage once on a paid off vehicle. Then I was involved in a hit and run accident - they hit and ran. I was left with a totaled vehicle for which I received salvage value and then had to purchase a new vehicle. So there are really two (at least) expenses - the loss of capital on the one vehicle and then the outlay (interest if financed) on a replacement vehicle. Now underinsured and uninsured coverage I have some trouble paying for and have found out that my policy has some coverage (subject to deductible) under the comprehensive for repairs to my vehicle due to un/under insured accidents.
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Old 05-19-2016, 08:44 AM   #11
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On my previous car, I dropped collision (but kept Comp) when the car turned 13 years old. Its book value was about $2000. Looking back, I probably should have dropped collision a year or two earlier, perhaps after I had dinged it up a little bit but never had it repaired. My current car is 9 years old so I will start looking at eliminating collision (it has not been dinged up, though).


If your state allows Uninsured Motorists Property Damage (UMPD) to be sold, I would add it to your policy if you drop collision so you retain at least some coverage on it.
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Old 05-19-2016, 08:54 AM   #12
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On my previous car, I dropped collision (but kept Comp) when the car turned 13 years old. Its book value was about $2000. Looking back, I probably should have dropped collision a year or two earlier, perhaps after I had dinged it up a little bit but never had it repaired. My current car is 9 years old so I will start looking at eliminating collision (it has not been dinged up, though).


If your state allows Uninsured Motorists Property Damage (UMPD) to be sold, I would add it to your policy if you drop collision so you retain at least some coverage on it.
You bring up a good point - perhaps 'paid off' should be balanced with current value when making the decision to self insure...as I suspect some do...wish I had.
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Old 05-19-2016, 09:14 AM   #13
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I drop comp/collision when the car's value drops below $8k to $10k. I still retain Uninsured Motorist Coverage.
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Old 05-19-2016, 09:33 AM   #14
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Most believe if a vehicle's worth $4,500 to $5,000, it's no longer worth carrying comp and collision insurance.

My problem is that I have an 8 year old Lexus and a 13 year old diesel pickup truck that are both worth $10K or more. I'll have to carry collision insurance for a ridiculously number of years before the value gets down.
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Old 05-19-2016, 06:33 PM   #15
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If you decide to drop comprehensive/collision insurance, this likely applies to rental cars as well. You may want this coverage on rentals so either use a credit card that provides insurance or buy extra when you rent.

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My daily driver is a 23 year old sedan worth $2500 and I don't carry comp or collision. I decided to rent a $350K supercar on a vacation last year and was delighted to be informed by USAA that I could add comp/collision on my beater that would then carry over to cover the supercar. So I added the coverage right before our trip and removed it after the rental car was safely back in the company's possession with no scratches or other damage on it.
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Old 05-19-2016, 07:54 PM   #16
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My daily driver is a 23 year old sedan worth $2500 and I don't carry comp or collision. I decided to rent a $350K supercar on a vacation last year and was delighted to be informed by USAA that I could add comp/collision on my beater that would then carry over to cover the supercar. So I added the coverage right before our trip and removed it after the rental car was safely back in the company's possession with no scratches or other damage on it.
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Old 05-19-2016, 09:26 PM   #17
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I'm somewhere in the "$5000 or less then drop" camp. On our new (used) minivan that's worth about $8000-9000 in the Kelley Blue Book, I decided not to get comp/collision. Other than road trips (which might total 3000-4000 per year max) we don't drive a lot. So far we've put about 80 miles on it on non-road trip driving.

In the event of a wreck and a total loss, I figure after the $1000 deductible and getting screwed ever so gently by the insurance company, we'll be out of pocket $6000 or so (assuming some salvage value for the van) and could eat that loss if it happens.

More likely is some neighborhood kid throws a rock through our window or some other random damage happens. If it's cosmetic I won't give a crap (we bought it with a few paint scratches and dings in it already). Otherwise I'll pay out of pocket to fix it. Since we would choose a $1000 deductible, many minor repairs would be below the deductible of our insurance.
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Old 05-22-2016, 10:33 PM   #18
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The theory says you should insure for losses you can't afford to pay. There are costs of insurance as well as what it pays - hence, over a life-time, the "average" person comes out ahead going naked except for potential large costs (especially liability).

I dropped collision on all 3 of my cars some years ago. Of course, they are 2000 or older.

Had an accident recently for which the other driver paid. The cost was just under $3K and was almost a total. Made me think I'd made the right decision as the cost for collision coverage drops very little even as the car ages. Guess it's sort of back loaded for the insurance co. As always, YMMV.
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Old 05-22-2016, 10:56 PM   #19
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Never had it, not even on the one new car I bought 30 years ago. I consider insurance to be for events I cannot afford, and replacing a car has never been a stretch.

Insurance companies make money, even after all of their overhead. I see no reason to be one of the reasons why.
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Old 05-22-2016, 11:19 PM   #20
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I have never had full coverage insurance. But, I do also buy cars around $10k, so it makes sense. I think it is a good strategy.
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