dropping collision ins.

[wellheeled]

I have a similar question - my 10-year-old Honda is worth around $2500-$3500 (according to KKB). For me to have comprehensive and collision ($1000 deductible each), it'd cost me around $40 more a month than if I went without ($100 vs. $140).

I have some money in my emergency fund, but I'm counting on this car to get me through the next 3 years. Should I keep the CC? I'd be saving less than $500 a year. But if something happens to my car, how much would the insurance company actually pay?

[cicy33]

I think that the only reason to not carry the insurance would be like the one above said have enough in a special account to replace the vehicle if it is damaged beyond repair. If you do not have the money to replace it than insurance is a good idea. I say $1000 or less no collision but above that definitely cuz that is alot of money. I know that there are some people on this board that $1000 and up is nothing but to me coming up with $1000 would take some serious doing and time. We are definitely low level though not poverty income. I would base it partly on the car and partly on your financial situation. If it is easier for you to pay a few dollars a month for coverage than to save enough to replace the car then have insurance. Cuz if you are going paycheck to paycheck how are you going to come up with $1000 much less more?

[mom-from-missouri]

I'd say the same as DisneySteve, but add the following--do you have enough saved up dedicated to the car, that you could use to replace/repair it with should you drop it? If not, keep it on there. better to be out $1000 deductible, than be out the possible $3000 to repair or replace it with. Thats per the Dave Ramsey book.

[lgslgs]

Am I missing an important factor here?

If your estimate of how likely you are to have car damage, and how much the damage would cost to fix is a lot different than the insurance company's standard table it can make a lot of sense to drop coverage.

We get a safe driver rate. We're in our mid 40's - so we are considered a safer age group. We drive two vehicles - a 90 & a 94. The insurance company would give us a fairly reasonable price on collision insurance and it would not pay out much if we had an accident.

What doesn't factor in is that our TOTAL mileage for two vehicles for last year was 1907 miles (791 on the 94, 1116 on the 90). We don't have to leave the house unless we want to - so we never have to go out and drive to work on an icy road, commute during peak commuter hours, or travel during times when the roads are likely to be full of drunk drivers (like this weekend).

We can shop during times the lots are less crowded and we always park at the far end of the lot to enjoy the walk and the decreased hassle.

We have a lot of deer around here and we don't drive during their peak running hours. Our lifestyle makes it unlikely that we have to make unplanned car trips other than twice a year (or so) unplanned veterinary visits.

Neither of us has had an accident or any form of car damage in 20 years.

If we did total a car, we'd be happy to downsize to just one.

We have savings set aside to cover unplanned expenses that may occur.

So for us, it makes no sense at all to pay for collision insurance.



Now take a person with a long rural commute, night shift job, bad roads, and employee rules that would make it very difficult for them to be able to take a work day off if there is a blizzard. That person has a much higher personal risk of collision than we do and likely has one even higher than the insurance companies would expect. Collision coverage is probably a good choice for that person.

Lynda