Question 1

Do I need collision coverage if I still owe money on my car?

Accepted Answer

Yes. Lenders require collision and comprehensive coverage on financed or leased vehicles to protect their financial interest in the car. You cannot drop this coverage until you own the vehicle outright or your lease ends.

Question 2

How long does a claim affect my insurance rates?

Accepted Answer

Claims typically affect your insurance rates for three to five years. The exact duration depends on your state, insurance company, and the severity of the claim. After this period, assuming no further claims, your premium should decrease.

Question 3

Can I keep comprehensive coverage but drop collision?

Accepted Answer

Yes, if you own your car outright. Many drivers with older vehicles drop collision while maintaining comprehensive coverage because comprehensive is often cheaper and protects against theft, vandalism, and weather damage regardless of how much you drive.

Question 4

What happens if I drop collision coverage and then have an accident?

Accepted Answer

Without collision coverage, you pay for all damage to your vehicle out of pocket. The only exception is if another driver causes the accident and their liability insurance covers your repairs. You need sufficient emergency savings to handle this risk.

Question 5

Should I file a small collision claim or pay out of pocket?

Accepted Answer

Use the calculator to compare the repair cost against your deductible plus the premium increase over three years. Small claims often cost more in increased premiums than you receive from the payout, making it cheaper to pay out of pocket.

Should I buy collision and comprehensive coverage?

Should I buy collision and comprehensive coverage?