Eliminating Your Monthly Rates For Collision And Comprehensive Car Insurance Rates
Collision and Comprehensive insurance are optional automobile insurance coverages. If you still have a lien against your automobile, the agreement you have with your lien holder will probably force you to carry this type of protection. If you have paid off your auto, you can decide to keep or drop these aspects of your policy. You can lower your automobile insurance premiums if you remove or lower these parts of your insurance policy's protection.
Collision insurance can compensate you for damages that occur when your insured auto hits or is hit by another automobile. It can also compensate you for your car's damages when a covered car hits a something other than a car such as a Jersey barrier.
Comprehensive insurance is also known as "Other than Collision." This part of your car insurance policy pays for damages caused by flood, vandalism, contact with birds or animals, etc..
Since both collision insurance and comprehensive insurance pay for damage to your automobile and not someone else's, you get to decide whether or not to drop these from your policy. However, if your automobile is leased, or you have a lien on your auto, you probably will not be able to do so because the actual owner of the auto or the lender will want their interests protected.
The liability portion of your car insurance policy is the primary part of the policy that pays others for their damages. If you hit another car and you don't have collision insurance, that fact will not impact the amount of money the other party might get.
Why Should You Drop Collision Insurance?
The rates for this part of your car insurance coverage may be more than you want to pay. If your vehicle is totaled, the insurance company will only pay you its book value. At some point, you may feel that the car's value has been reduced enough that thepremiums of the collision insurance is no longer justified by the potential payment you might get from your insurance company. If you own your automobile free and clear you can contact your insurer and drop or lower the coverage.
You can reduce your collision coverage by raising the deductible. This will slash the cost and still give you some protection. Your bank or lender or leaser may allow you to raise the deductible since this protects their interests to some degree.
Why Should You Drop Comprehensive Insurance?
The logic behind cutting or reducing car comprehensive insurance is the same as the thought process associated with removing collision insurance. However, since the cost for comprehensive insurance is less than the cost of collision insurance, you may want to keep it even after you have dropped your collision coverage.
If your vehicle is leased or you have a lien on it, you may not be able to drop the coverage. However the leaser or bank or lender may allow you to reduce the coverage by raising your deductible. This will reduce your rates, although not as much as completely cutting the coverage would.
Most vehicles lose value as they get older. This reduces the amount of money that an insurance company is likely to pay to repair or replace a car. At some point you may feel that the amount of premium your auto's collision or comprehensive coverage adds to your automobile insurance bill is too much. Exactly when that point comes is determined by your personal comfort level with risk.
Eliminating comprehensive insurance coverage and/or collision coverage means that you take more risk. If your feel that you are unlikely to have an at fault accident because you are a good driver you may feel that you can take this risk. If you garage your vehicle your auto is perhaps less likely to be stolen or vandalized. If this is true, you may want to drop the coverage.
