Financial experts generally recommend dropping collision coverage when the annual cost of your collision premium plus your deductible equals or exceeds 10 percent of your vehicle's total actual cash value. For older cars with high mileage and depreciated market worth, paying high collision premiums provides diminishing financial returns because the maximum payout in a total loss claim will be severely limited. Before dropping the coverage, ensure you have sufficient personal savings set aside to repair or replace the vehicle entirely out of pocket if an accident occurs.
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