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dented carSaving money where you can makes sense for everyone. With the costs of everything creeping up, it’s inevitable that most everyone will search for ways to reduce household expenses. One expense many people typically consider reducing is their car insurance coverage.

With the average driver having an accident every 10 years, you may think that your car insurance coverage can be trimmed down a bit. In particular, if you are like many people who have never had an accident, you may not see the value in keeping your collision coverage. But before you reduce your car insurance, make sure it’s a smart move.

Understanding Collision Coverage

Although car insurance minimums and coverage options vary across states, most collision coverage works the same way. If you incur damage to your car as a result of an accident with another car or object, you may file an insurance claim with your insurance provider for the damages. Barring any issues with their insurance coverage, you will only be responsible for paying your deductible, and then your insurance company helps cover the rest. It is important to note, if the cost to fix the damage to your car is more than the value of your car, most insurance companies will cut a check for the market value of your car instead of paying the repair bill.

Ultimately, collision coverage helps you shift financial responsibility. Instead of you being responsible for the cost of your repairs or the replacement of your car following an accident, your monthly insurance premiums helps you purchase the financial backing from your insurance company.

When Should You Eliminate Collision Coverage?

In order to have collision coverage on your car, you have to pay extra for the service. The amount you pay is determined by a few factors. For instance, your driving history and the type of car you have is taken into consideration when your insurance company determines how much you are going to pay for collision coverage, which is why some people consider removing it. But is it worth it to remove the coverage?

For starters, if you have a loan on your car, you will likely be required to have collision insurance per your purchase agreement with the company that financed your car. In this situation, having collision coverage isn’t a choice, it’s a must-have.

Bear in mind that that the type of coverage you have depends on your personal situation. The following scenarios may help you determine the worth of your collision coverage.

Scenario 1—You are financially set:
If you are financially established, then you may not benefit from paying extra for collision coverage. You could pocket the money instead, and cover the expenses yourself in the event of an accident.

Scenario 2—Your car doesn’t have a high resell value:
Cars that are older may cost more to repair than they are worth. If you research the cash value of your car and find that it’s simply not worth the extra expenses, then you may want to eliminate collision coverage.

Scenario 3—You don’t drive the car much:
Clearly, the more you drive, the more likely it is you will have an accident. If you are not driving a car much, then it’s possible you don’t have to maintain collision insurance because the odds of getting into a car accident are small.

Whether you should cut your collision coverage is completely up to you. After an assessment of your financial situation and your driving habits, you may find that you don’t need to have collision coverage.

Which coverage is right for you? Call Owen & Associates at (770) 422-0456 for more information on Marietta auto insurance.
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