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Dropping Collision Coverage from Your Car Insurance Policy

Here's what you need to know...
  • If you have a loan on your vehicle or are leasing it, you are probably required to carry collision coverage
  • Collision insurance covers your vehicle when you are responsible for an accident, if you drop this coverage, you are responsible for your own damage out-of-pocket
  • You should research to make sure you’re not paying too much for collision coverage if you decide to keep that option

If you choose to drop collision car insurance coverage you can do so with your agent by requesting a change to your car insurance policy.

However, before dropping collision car insurance you need to be sure that you are not required to carry this type of protection by your lender or lessor.

You also need to analyze the make, model, and condition of your car to make sure it does not warrant you to carry further financial protection on it.

Read on to learn all about dropping collision auto insurance coverage from your policy and then enter your ZIP above to compare FREE online car insurance rates!

What Collision Car Insurance Covers

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Collision car insurance is financial protection for your car. If you carry liability, which is required by every state in some fashion, then you have car insurance for the other person’s car (provided you are at fault for the accident).

In other words, if you are at fault for an accident and you have liability, then the other person’s car will be covered by your car insurance.

Damages sustained to your car are not covered under that same liability policy. The only way to get coverage for your car is with collision car insurance coverage.

In reverse, if you are the victim of an accident and the other person has liability, then your car will be covered by that person’s car insurance.

In addition to accidents, collision covers any type of incident that involves a collision with your vehicle.

If you hit a pothole and run into a tree, you will be covered by your collision policy. If you do not have collision, then you will be responsible for all costs incurred.

Another example of something that is covered by collision car insurance is damage from a shopping cart while you are inside the grocery store. Damage suffered by your car due to various road conditions is also applicable.

Am I paying more than I need to for my collision coverage?

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Before you decide to eliminate this coverage, there might be several ways to lower your premiums and still have some insurance benefits. Increasing the deductible that you opted for when you first purchased your insurance is a possibility.

Also, you can choose a lower coverage amount, especially if your car is getting older and losing value.

Do not forget that you can make changes to your policy as your car situation evolves. A good driving record, your age, a move to a different state, a new job, or a different address can all have a significant effect on what you pay for auto insurance coverage.

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When Collision Car Insurance is Required

If you have a new car that is financed or leased, then typically the lender or lessor will require you to carry collision and comprehensive car insurance coverage. Some lenders will also require this even if you purchase an older car.

The lender is concerned about reducing his risk, so as long as he is the title holder to your car then he wants to make sure the car has complete protection.

Lessors also are concerned with collision because when they lease the car to you they are in essence renting the car to you and they are still the owner.

For the same reason as the lender, the lessor wants to reduce financial risk and can insist that you carry collision car insurance coverage on your leased vehicle.

How to Drop Collision Car Insurance Coverage

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If your lender or lessor does not require collision car insurance or if you own your car outright, you can decide if you want to continue to carry your collision car insurance coverage.

If your vehicle is older and doesn’t warrant the financial protection that you would gain from having the collision coverage, then you can ask your insurance agent about removing it from your policy.

Changes to car insurance policies can usually be done at any time and the premium will then be prorated accordingly.

Sometimes collision coverage is bundled with comprehensive coverage, so if that case applies to your situation then you may need to wait for your policy term to end and then just renew the policy without the coverage.

If the car insurance company only offers a bundled package then you will need to determine if you are willing to lose comprehensive insurance as well.

Comprehensive insurance is the “everything else” insurance category. It basically covers all damage to your car that is not related to accidents or any other collisions.

It covers:

  • Fire
  • Storms
  • Theft
  • Vandalism

Comprehensive also covers damage sustained to your car if you accidentally hit an animal such as a deer. The only thing comprehensive really does not cover besides collision is mechanical failure.

Collision and comprehensive coverage go together in the respect that one covers collision damage and one covers non-collision damage. If your agent has the coverage bundled then you will need to find out if you can drop only the collision car insurance coverage.

If it is not bundled then you may want to decide if it is worthwhile to keep your comprehensive coverage while still dropping the collision.

Once you determine that you are going to drop collision car insurance then you should notify your agent to find out the procedure for that car insurance company. Sometimes a phone call is all that is needed, but other times the request needs to be made in writing.

You should never have to do it in person, although most agents welcome visits.

Comparing Collision Car Insurance Quotes Online

If you need to wait to drop your collision car insurance coverage until your policy expires, then you should spend some time shopping for quotes prior to your renewal date.

Even if you can drop the collision in the midst of your term, removing it from your policy will result in lower rates from other agents as well so it is a good time to request quotes and see who can offer you the best deal.

To get FREE quotes now, enter your ZIP code below and shop for car insurance rates conveniently online!

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