When should I drop collision coverage?

Most lenders will require that you have comprehensive and collision coverage in addition to your state-required coverage. Many people, however, don’t realize that there is a difference between comprehensive insurance and collision insurance.

 

Some people mistakenly keep their comprehensive coverage and drop their collision coverage thinking that the comprehensive coverage provides insurance for every contingency.Understanding the difference is critical if you want to know when dropping collision coverage is okay and when it is not.Read on to learn when you should keep and when you should cancel collision coverage from your auto insurance policy and then be sure to enter your zip in to compare free quotes for car insurance!

As you probably already know, if you lease a vehicle or if you used a lender when you purchased your car or truck, you have to have more insurance on your vehicle than someone who owns his vehicle outright.

The Difference between Comprehensive and Collision Insurance Coverage

Comprehensive insurance is important because it covers damage caused by nature including hail, flood, and fire.In addition, comprehensive coverage provides you with coverage for theft and vandalism as well as damages caused by animals.Collision insurance covers all collisions that occur with your vehicle including if you strike another car, an animal, or an object such as a tree, or fence.

As you can see, each of these types of coverage offers something valuable and different to your insurance coverage.

Both types can be expensive, however. In order to keep your premiums down, you will need to choose a deductible level that you are comfortable with.The deductible represents the amount of money you will pay out of pocket if you make a claim. You should check with your insurance company to see what the deductible options are.

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When it’s Okay to Drop Collision and Comprehensive Coverage from Your Vehicle

Some insurance agents will recommend that you never drop either of these types of coverage.Usually, individuals without these types of coverage cannot afford the out of pocket expenses to repair their vehicle if an accident does occur.If you live in a high-risk area, then you may want to continue your comprehensive coverage. But if damage from nature is rare in your city or state, then you can save a lot of money by dropping your comprehensive coverage.However, collision coverage is different because the insurance required by states does not coverage damage to your own vehicles if you cause an accident.The state liability minimums will cover whatever the damage is to the vehicle that you hit, not your own. With collision coverage, however, your vehicle is also covered if you are the cause of the accident.

However, it doesn’t make sense to pay for coverage that costs more than the value of your car or truck.

Even the most careful drivers may find themselves in a car accident and having the right coverage can make the difference between getting everything repaired immediately or fighting lawsuits and financial disaster.

Choosing the Most Affordable Car Insurance

Now that you have at least a basic understanding of what collision and comprehensive coverage means for your vehicle, you need to decide what to buy.Like almost everyone else, you probably want to get the best prices for the type of insurance that you choose. The quickest way to do this is by using our free quote tool at the top of the page.

Using our free quote tool allows you to compare the rates between several companies at one time.

You can compare your state’s minimum coverage requirements, a medium coverage level, or a full complement of every type of insurance that you could want from an auto insurance company.Give our FREE quote tool a try by entering your zip code to start comparing insurance rates today.

Case Studies: When should I drop collision coverage?

Case Study 1: Assessing Cost vs. Value

John owned an older vehicle with a market value of $3,000. He reviewed his car insurance rates and found that the cost of collision coverage exceeded the worth of his car. After careful consideration, John decided to drop collision coverage and switch to liability-only insurance, saving money on his premiums.

This case study highlights the importance of evaluating the cost of insurance in relation to the value of the insured vehicle.

Case Study 2: Evaluating Coverage Needs

Emily had comprehensive and collision coverage on her car, but she lived in an area with low risk of natural disasters and had a secure parking facility. After assessing her circumstances, she determined that the likelihood of needing comprehensive coverage for damages caused by nature was minimal.

She chose to drop comprehensive coverage and maintained only collision coverage, aligning her policy with her specific needs. This case study emphasizes the importance of evaluating personal circumstances when deciding on coverage options.

Case Study 3: Comparing Quotes for Informed Decisions

Sarah owned an older vehicle and wanted to explore options for reducing her car insurance costs. She used an online quote comparison tool to gather quotes from multiple insurance companies. Through the comparison process, she discovered that dropping collision coverage would result in significant savings without compromising her coverage needs.

Sarah made an informed decision based on the quotes she received. This case study highlights the value of comparing quotes to find the most affordable insurance options.

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