Reduce Your Insurance Premiums for Collision Coverage

Collision coverage in insurance is just what it sounds like. It covers your vehicle (not the other person's vehicle) when it is hit by or hits another person or object. Collision coverage is not required by law but if you have a lien holder on your vehicle, they will require you to carry this coverage in your insurance policy. There are several ways a policyholder can save money on their collision coverage.

Raise Your Deductible

The deductible is the amount you have to pay in a claim 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 should you have to pay it, 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. Coverage is normally limited to the cash value of your vehicle. Consider the cost of the coverage and the value you would receive in a claim. If you are paying $500 per year to insurance a vehicle for collision coverage with an actual cash value of $2,500, you are paying 20 percent of your vehicle's value for one year's coverage. In the event that your vehicle is totaled, the most the insurance company would pay out would be $2,000. In this case, the cost of the coverage far exceeds the benefits received.

Change Vehicles

Consider changing the type of vehicle you drive to save substantially on collision coverage, as well as other types of auto insurance coverage. Insurance companies rate vehicles on a point system. Higher points are assigned for vehicles that are sports models, perform poorly in safety tests, are hard to repair, easily stolen or are very expensive. You can get more information on the most inexpensive cars to insure from The most and least expensive 2010 vehicles to insure published by Insure.com and provides a listing of the twenty least expensive 2010 vehicles to insure.

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Guide to Collision Car Insurance Coverage

The most and least expensive 2010 vehicles to insure