Collision coverage in insurance is just what it sounds like. It will pay to fix or replace your vehicle (not the other person’s vehicle) when you’re in a accident that involves hitting another car or stationary object, like a bridge or a tree. It also can help if someone or something else hits your car while it’s parked.
Collision coverage is generally not required by law, but if you have a loan on your vehicle, the lender will require you to carry this coverage. Here are three ways you can save money on collision insurance:
- Raise your deductible: The deductible is the amount you have to pay to pay toward repairs before your insurance company picks up the cost. The higher your deductible, the lower your insurance premium will be. If you feel a larger deductible would not set you back financially, this is a great way to save money on your auto insurance premium.
- Drop collision coverage: For older vehicles, it sometimes is a wise decision to drop the collision coverage completely. In the event of a total loss, the claim payout is normally limited to the cash value of your vehicle. Consider the cost of coverage and the value you would receive in a claim. Dropping the collision coverage on an older vehicle is also a great way to save when adding a teenage driver to your policy. You can list your teenager as the driver for an older vehicle without collision coverage, which will help offset the rate increase for adding a teenager driver.
- Change vehicles: Consider changing the type of vehicle you drive to save substantially on collision coverage. Some vehicles are more costly to repair than others, which can make the collision coverage more expensive. If you are in the market to buy a vehicle, make sure you check out the least expensive cars to insure.
