Drop collision insurance when it no longer makes financial sense. This free collision insurance calculator compares your annual collision premium against your car’s current value to find your exact breakeven point. If you would pay more in premiums than your insurer would ever pay out, it’s time to drop collision insurance and pocket the savings.
How the Collision Insurance Calculator Works
Our collision insurance calculator uses a simple but powerful formula: it divides your car’s maximum payout (value minus deductible) by your annual collision premium. The result tells you how many years of premiums it would take to equal the most your insurer would ever pay in a total loss. A breakeven under 2 years means keep coverage. Over 3 years? You should strongly consider whether to drop collision insurance and save hundreds annually.
When Should You Drop Collision Insurance?
Most experts recommend you drop collision insurance when your annual premium exceeds 10% of your car’s value. For example, if your car is worth $5,000 and you pay $600 per year for collision, you’re spending 12% of the car’s value annually. At that rate, even one year without a claim saves you more than the coverage is worth. Use our collision insurance calculator below to see your exact numbers.
For more information about coverage types, visit the Insurance Information Institute.
Browse our full guide to auto insurance coverage types to understand your options, or check your state’s minimum insurance requirements.