To Drop or Not to Drop Comprehensive Car Insurance?

As you know, liability, collision, and comprehensive policies are car insurance types. 

The first is mandatory, but the other two are optional. You cannot get collision insurance without the comprehensive one most of the time. The collision insurance is somewhat self-explanatory – it protects you in case of the usual run-of-the-mill road accidents.

On the other hand, comprehensive coverage protects your vehicle against major physical damages that you cannot predict (to their entire extent):

  • Natural disasters (floods, fires, etc.);
  • Storm damage: fallen trees, hail, etc.;
  • Explosions;
  • Flying/falling objects, structures, etc.;
  • Vandalism;
  • Theft;
  • Riots, civil unrest, etc.

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Most people consider comprehensive insurance to be an expensive investment. After all, what are the chances that hail will wreck your car? What are the chances a tornado picks up your vehicle and turns it into flecks of metal? Not many people consider comprehensive insurance a necessary expense. Especially if they keep their cars in garages and drive carefully. On the other hand, what happens if a tree totals your car during a storm? What then?

Do You Need Such Insurance?

This type of coverage has its reasoning. Comprehensive car insurance protects you against dramatic events. Most people consider such occurrences not likely, perhaps impossible. Yet, how many times did hurricanes cause millions of dollars’ worth of damage? 

What happens if a tree turns your car into a pile of metal? The insurance company will cover the costs of repair/replacement. But in what conditions? 

It all depends on the value of your car. Don’t think about the money you spent to buy it. It is the value established by your state and the one coined by the insurance company. First, learn more about your current total loss threshold by state (depending on what place you call “home”). Your research should include data on car total loss conditions in your area vs. the conditions you signed up for with the insurer. Some homework is mandatory here. 

  • Make sure you know the provisions of your insurance policy.
  • Check your deductibles.
  • Check your insurance premiums.
  • See how much money you can pay for repairs. 

Discuss with your insurance agent all these matters and, if you still need a second opinion, discuss with a lawyer. An attorney can explain a lot more about liability, the total loss threshold calculations in your state, and the fine printed lines on your insurance contract that you might want to consider before any claim. 

It is the best course of action before you decide whether to drop your comprehensive coverage. 

Most experts recommend checking the Kelley Blue Book. The tool allows you to learn the value of your vehicle. 

Say someone stole your car or it suffered severe damages. 

  • See the amount needed to repair/replace the vehicle.
  • Can you pay the sum? If not, it is better to keep the comprehensive car insurance. 

You may drop the coverage only in the following situations:

  • You own your car in full, and there is no lease or loan to consider;
  • The car is old or tired and you intend to change it.

How to Decide Whether to Drop Your Comprehensive Coverage

If you live in an area vulnerable to natural disasters, don’t drop your comprehensive coverage. Experts suggest that you buy one or renew the existing one. With the current climate change concerns, it is better to be safe. 

Few people talk about it, but if you live in an area registering high levels of criminality you should also keep your comprehensive car insurance. Under this type of coverage falls the repair or the replacement of a smashed car window caused by someone trying to break into your car. 

You can reconsider your comprehensive insurance in some circumstances. Check the Insurance Information Institute for details. Apply all you learn to your local laws. 

  • Take the amount you pay for this protection for one year.
  • Multiply that number by 10.
  • Check both your state’s total loss threshold and the Kelley Blue Book estimation.
  • Is the value of your car lower than that number?
  • Talk to your insurance agent. It may not make sense to pay such coverage. You may receive better offers and deductibles. 

The goal of comprehensive car insurance is to protect the vehicle from non-accident damages. If the value of your car is already low, it may not be worth protecting. Experts recommend you to make some calculations before you keep or drop this type of insurance and follow the 10 percent rule.

  • For instance, if your annual total auto premiums for both comprehensive and collision insurance amount to 10% or higher than the book value of your vehicle, you should consider dropping this type of coverage.

On the other hand, if you have an expensive car, it makes sense to have full coverage on it. Specialists also recommend you get full coverage if you travel a lot by car in severe weather conditions and areas. In this second case, the chances of you having an accident are higher. In addition, the probability of your car suffering weather-related damages are considerable. 

What to Do to Get Better Car Insurance?

Many people get car insurance and renew it without taking a second look at it. However, you should always shop for better offers.

Here are a few ways for you to get better insurance coverage:

  • Look for new insurance opportunities every year;
  • Compare prices and negotiate higher deductibles with the agent;
  • Supervise your credit score. Most insurance companies know your credit history;
  • Take driving defense classes. They help with better premiums;
  • When you buy homeowners’ insurance and car insurance, try to get them from the same insurance company; you will often receive discounts;
  • If you register low mileage, take advantage of connected discounts;
  • Discuss your car insurance with a lawyer. You will learn about liability, total car loss, damage covering, etc. 

Do you pay comprehensive insurance for your vehicle? Have you filed any claim with your company for damages covered by such a policy? Did things work out for you? 

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