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When to Drop the Collision and Comprehensive Insurance

Collision and Comprehensive Insurance Collision and Comprehensive Insurance

Jul 26, 2023

Auto Insurance

Dropping collision and comprehensive insurance for your vehicle is an important decision that can impact your insurance coverage and financial situation. While these coverages provide valuable protection against accidents, theft, and other damages, there are circumstances where it may be more beneficial to consider dropping them. By understanding your vehicle's risks, costs, and specific needs, you can make an informed decision. This blog will guide you through the factors to consider when deciding whether to keep or drop collision and comprehensive insurance. 

Your Vehicle's Cash Value

Your car's actual cash value is the amount your insurer would pay to replace it after 100% damage/loss in an accident or theft. Is this value worth the cost of insuring your car? That's an important question when assessing the need to keep comprehensive collision insurance on your vehicle, especially if it's old.

What is Deductible?

When your car gets damaged in an accident, you must pay a certain amount called a deductible before your insurance company helps cover the rest. It will help if you compare this cost with the premiums you pay for collision or comprehensive insurance and the amount you could receive from the insurance company.

When to Discontinue Coverage?

Deciding when to discontinue coverage for your insurance policy is an important consideration. Factors such as the value of your assets, the potential costs of repairs or replacements, and the premiums you pay all play a role in this decision. By carefully evaluating these factors, you can make an informed decision to discontinue coverage and potentially save on insurance expenses.

Which One is Better Value for Money?

You can choose whether to drop comprehensive or collision coverage individually rather than both at the same time. The decision often comes down to assessing the value you receive for your money. When faced with this choice, people opt to retain comprehensive insurance as it covers a broader range of risks, including theft and fire damage. By considering your specific needs and priorities, you can decide which coverage option offers better value and aligns with your insurance requirements.

Consider the Risks Involved

Approximately 95% of drivers have not been at fault in an accident within the past three years. Based on these statistics, the safe driving record suggests a lower requirement for collision insurance. However, car owners residing in high-risk areas for car theft, fire incidents, or natural disasters may find comprehensive insurance essential. Evaluating your circumstances and location is crucial to determine the importance and necessity of comprehensive coverage to make an informed decision about your insurance needs.

How Long Do You Wish to Keep Your Car?

As your insured vehicle gets older, the cost of collision and comprehensive insurance coverage tends to increase. After several years of coverage, there comes a time when the total premiums paid approach the potential payout from the insurer. At this stage, it might be financially advantageous to consider discontinuing both coverages and taking responsibility for any repair or replacement expenses. 

Learn More About Comprehensive & Collision Coverage with Little & Sons Insurance Agency!

When deciding whether to keep or drop collision and comprehensive coverages on your car, it's crucial to consider the points discussed. For expert guidance on choosing the right auto insurance policy for your needs, turn to Little & Sons Insurance Agency. Our knowledgeable team will help you find the coverage that suits your requirement. Contact us today at 18449548853 for more information. 

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