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Ask Dave

When To Drop Collision Insurance?

Is there ever a time that you should not buy collision insurance?

QUESTION: Ron asks when is it no longer necessary to pay for collision insurance on your car?

ANSWER: The reason people say that is because you can work yourself to a point of being self-insured.  But here's the thing, say you drive a $10,000 car.  If you wreck it, that's $10,000 out of your emergency fund.  $500 a year could have saved that $10k for you.

What it boils down to is transfer of risk.  For $500 or whatever bucks a year, I think it's worth it to always carry collision.