Switching to Collision Only Type Car Insurance Can Cost You in the Long Run!

This is a bit of a trick question as the best answer is that it is really never a good time to go with collision only insurance. Comprehensive coverage is sold in a package deal from your insurance company and If you chose to carry just collision insurance then that would mean you have also opted out of carrying any Liability insurance coverage. That would be a really bad idea since this is what pays the other driver and or property owner in the event that you do some damage to them their car or their property. The fact is with most insurance companies that I have dealt with the collision insurance coverage can only be purchased along with other components like comprehensive coverage.

Another fact is the law in most states require minimum coverage for bodily injury liability and property damage which are all unrelated to the collision component in your insurance policy. In Ohio the state minimums are 12,500 per person liability with 25,000 maximum limit per accident and 7,500 for property damage. if you do not have the state minimum insurance then you can not drive legally in the state of Ohio. So opting for collision only is not really an option here.

So my experience is exactly one eighty degrees opposite of the plan to have collision insurance only since I would prefer to save the money on premiums and the deductible for carrying collision and if something happens to my car I can usually fix it myself. The collision deductible could be higher than the cost of replacing the car. When you drive older cars there comes a point in their lives when the cars replacement value is actually so low that the amount an insurance company would pay if your car were totaled would be less than the annual rates and deductibles you would have to pay. so the break even point for me is when the value of the car is lower than the cost to repair or replace it factoring in the cost of insurance and any deductible that may need paid out of pocket.

The best ways to lower insurance premiums are through basic policy changes such as raising your deductible as this will lower your monthly insurance bill. Second way is to make sure you are only paying for the basic coverages that you absolutely need. For example if you have a car that is worth $1500 and the premiums per year for collision are $100 a month plus deductible of $500 then you will actually lose money in the event the car is totaled since they will only cover the book value of your car anyhow.

Now liability is a whole different insurance problem and it is imperative in our modern world that you carry the liability since there is no way we could pay the deductible let alone all the premium money you threw down that rat hole! What can possibly go wrong? Well for one thing if you are under insured and have a serious accident without liability coverage your entire life could be turned upside down. The financial impact alone could even cost you any equity you have built since you would probably be open to a lawsuit and the house you live in might be sold to cover legal bills!

So I feel that it is much smarter to go with a solid coverage plan that protects you and your family in the event something goes terribly wrong even if it costs more per month than you would care to pay.

Last thought on collision only insurance, I have learned that it is always wise to evaluate your insurance coverages across the boards about once every six months. This does not mean you would change companies however you would check with your agent to see if there are any new programs or rate reduction plans that you qualify for.