When to drop collision insurance
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Your Car’s Value
Collision coverage pays your car’s fair market value if it’s destroyed, or for repairs if the vehicle is salvageable. Some policies also have the option of other features like towing and roadside assistance. If you can come out of pocket for these things without too much pain, you probably don’t need collision coverage. If your car is older, you might consider canceling collision coverage and setting the money aside instead so you’ll have it to pay for repairs or to purchase a new vehicle. Insurance.com suggests using the 10-percent rule: think about dropping the coverage when your annual premiums equal 10 percent of the car’s current fair market value.
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