6 Signs It’s Okay to Drop Your Collision Coverage in Louisiana
What if a single phone call could help you save money each and every month?
If you’re like most drivers in Louisana, you feel like you’re paying too much for your car insurance. One of the golden rules of insurance premiums is that the more types of coverage you have, the more you are going to pay.
That’s why one of the simplest and most effective ways of reducing your monthly bill is to drop your collision coverage. But this can be dangerous. If you take this step under the wrong circumstances, you may be stuck with a major bill if you get into an accident (especially if you’re the one at fault).
So, how can you know when it’s safe to drop this coverage? That’s where we come in. Keep reading to discover the biggest signs it’s okay to drop your collision coverage in Louisiana.
1. Your Car Isn’t Worth Much Anymore
The primary reason that you have collision coverage is so that your insurance company will repair or even replace your vehicle in the event of an accident, even if you happen to be the one at fault. Therefore, one of the biggest signs that it’s okay to drop collision is that your car just isn’t worth that much anymore (you can always check Kelly Blue Book to verify this).
In that case, you might actually be better off just replacing the car outright in the event of a major accident on the streets of Louisana. The alternative is potentially paying more in premiums each year than the car is worth. In fact, further in this guide, we have a handy calculation to help you figure out when you’re officially paying too much for an old car.
2. You Don’t Drive As Much As You Used To
One of the few positive outcomes of the COVID-19 pandemic is that more people now work from home than ever before. This results, of course, in fewer people commuting to work each day. Whether you’re working from home or not, if you find yourself driving a lot less than you used to, then it may be time to drop collision insurance.
The less you drive, the less likely you are to get into an accident in the first place. If you’re barely driving, especially in places like the Big Easy, then you are paying for insurance that you will most likely never use. Dropping that coverage can help you save on your premium, and you may also qualify for a discount from your carrier for not driving very much each month.
3. You Can Afford to Pay for Repairs Out-of-Pocket
Just because your car has dropped in value doesn’t mean that you want to rush out and replace it. However, if you intend to keep an older vehicle, just ask yourself: how expensive would it be to repair it after an accident?
Like insurance premiums, repair costs are always higher when the vehicle is newer and more expensive. If the potential repair bills for your own older vehicle are so low that you can afford to pay them out-of-pocket, then it’s time to drop collision insurance. At this point, you are literally paying for something you no longer need.
4. The Vehicle Is On Someone Else’s Insurance
Most of the scenarios we have outlined apply primarily to older vehicles or vehicles that aren’t driven very often. However, here’s something that could potentially affect every vehicle and every driver: if the car is covered by someone else’s insurance, you most likely don’t need to pay for collision coverage.
This almost exclusively applies to younger drivers who are covered under their parents’ insurance. While it’s important to eventually get your own coverage, you don’t have to rush into things. If someone else is footing the bill to keep your car safe on the mean streets of Louisiana, the last thing you need to do is make expensive monthly payments for collision coverage that you could otherwise be saving.
5. The Premium Is Now a Significant Fraction Of the Car’s Value
By now, you’ve probably figured out that the decision to drop your collision coverage is a bit like a real-life math problem. Like other drivers throughout Louisiana, you must determine whether you are paying more each month for collision than you really need. But how can you know when you’re really paying too much?
One easy way to do so is to compare your car’s current value with how much you are paying on your monthly premium. If the premium is 10% or more of the car’s value, then it’s time to ditch the collision insurance.
6. You’re Getting Ready to Buy a New Car
Are you getting ready to buy a new car, but you’d like to save up a bit of money for a downpayment first? In that case, it may be worth dropping collision coverage right away.
The logic here is simple: if you’re already planning on getting a new car, then you’d just end up replacing an older one after a bad accident. If you go ahead and drop collision coverage, you can stick back everything you save on the monthly premium to help pay for a new ride, letting you cruise Louisiana in style.
Get the Most Affordable Car Insurance in Louisiana Today!
Now you know the most important signs that you need to drop your collision coverage while driving around in Louisiana. But do you know who can provide the best coverage at the most competitive prices, no matter how much coverage you need?
USAgencies makes it easy to find a policy that not only meets your needs but also fits within your budget. Request a quote online, pop into one of our local offices in Louisiana, or give us a call at 800-420-3712 to get started.