Q&A Topics

Thursday, March 27, 2014 12:56:02 PM

If I own an older car that I rarely drive, should I drop my collision coverage insurance?

It’s important to understand how much you pay for collision coverage and assess whether the cost is worth the potential financial risk. For instance, if your car is worth $2,000 and your collision premium is $500 per year, that’s 25% of your vehicle’s value. Additionally, if you have a $1,000 deductible, the most you could ever receive from a settlement would be $1,000. If you have enough in savings to replace your vehicle, you may not need collision coverage.

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Laura Adams is a personal finance expert, award-winning author, and consumer advocate. As Senior Insurance Analyst, she represents insuranceQuotes in the media and works to make sure consumers protect their financial futures by having the right kinds of insurance.

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