Pros & Cons of Having Collision Insurance

Benefits

• Collision insurance prevents you from having high out-of-pocket expenses in the case of an accident. If you have little savings, collision insurance protects your investment in your vehicle and ensures that you will be able to afford repairs, assuming you can pay the deductible. This is especially important for expensive vehicles.
  
  

Drawbacks

• The premiums on collision insurance can be expensive and you may never end up using it. In addition, if your car is not worth much and you have a high deductible, the insurance company will end up paying very little toward the repairs. It may be more cost effective to not have coverage and put the money in savings instead.
  
  

Considerations

• If your car is leased or financed through a bank, your agreement may require you to carry collision insurance on the car to protect the lender. Check your terms before choosing to not purchase collision insurance.