Will I Need Collision Insurance if My Car is Paid Off?

Anytime your car is involved in an accident, besides the scratches and dents, you also need to think about the effect of the accident on your auto collision insurance coverage.

Although collision insurance is not mandatory, if you’re buying or leasing a car, you will be required by your lender to purchase both collision and comprehensive coverage. However, if the car is paid off, it becomes your decision if you need collision coverage or not.

Here are a few things you need to consider while deciding whether to get auto collision insurance coverage.

Listen to Your Wallet

Collision coverage costs a few hundred dollars every year, but it covers the cost of repairing or replacing your car in the event of an accident. However, collision coverage may be significantly more expensive if you have a history of accidents on your driving record. So, your decision could depend on how much you’re spending on the coverage and whether that amount fits into your budget.

Know Your Car’s Value

Can you afford to repair or replace your car without an auto collision insurance coverage? If you’re not financially buoyant to take on major repairs out of pocket, you probably need to maintain your coverage. Also, a car-specific insurance bundled with collision coverage could save you on the major repair costs associated with luxury vehicles. Additionally, if the impact of staying without a car is enormous and will significantly affect your daily life, you would probably benefit from collision insurance.

Estimate Your Exposure to Risk

Car insurance with high risk may require a collision coverage. If you live in a high-risk location with a high propensity for collision or accident, or if you are a high-risk individual of a certain age, you may need to have collision insurance coverage.

Choose the Best Fit

Research your costs, weigh your options and choose a policy with a deductible that fits your budget. If you plan to use your collision coverage for only major damages, you may want to consider setting the deductible higher, that will help lower the cost.

If your car is paid off and you are aware of the potential disruption to your life if you were to be involved in a car accident, then it is essential to have the right collision insurance coverage.  For all of your auto insurance needs, visit Abatelli Group, Inc. We serve Whitestone, Flushing, Bayside, Little Neck, and surrounding cities of New York with reliable coverage. We are ready to assist you with all of your insurance needs.

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