When to Drop Comprehensive Car Insurance
When to Drop Comprehensive Car Insurance
Comprehensive car insurance can be a valuable asset, but it can also be expensive. If you have an older car, you may be wondering whether it’s still worth paying for comprehensive coverage.
In general, you should drop comprehensive car insurance if your premiums exceed about 10% of your vehicle’s value. This is because the maximum amount you could recover from comprehensive coverage is typically the actual cash value of your car, minus your deductible. If your premiums are higher than 10% of your car’s value, you’re essentially paying more for coverage than your car is worth.
Here’s an example. Let’s say your car’s actual cash value is $5,000 and you have a $500 deductible on your comprehensive coverage. The most you could recover from comprehensive coverage if your car were totaled in an accident or stolen is $4,500. If your premium for comprehensive coverage is $450 annually (10% of the maximum $4,500 the insurance company would pay), you should consider dropping your comprehensive coverage.
Of course, there are a few factors to consider before you drop comprehensive coverage. First, you need to make sure you have liability insurance. All states require liability insurance, and it’s important to have this coverage in case you cause an accident.
Second, you need to consider your financial situation. If you can’t afford to replace your car if it’s totaled in an accident or stolen, you may want to keep comprehensive coverage. However, if you can afford to replace your car, you may be better off dropping comprehensive coverage and saving money on your premiums.
Finally, you need to consider your risk tolerance. If you’re worried about your car being damaged or stolen, you may want to keep comprehensive coverage. However, if you’re comfortable with the risk of not having comprehensive coverage, you can save money by dropping it.
If you’re not sure whether or not to drop comprehensive car insurance on your older car, talk to your insurance agent. They can help you assess your risk and make a decision that’s right for you.
Here are some additional tips for saving money on car insurance:
- Shop around for quotes from different insurance companies.
- Raise your deductible.
- Take advantage of discounts, such as discounts for good driving records, multiple cars, and anti-theft devices.
- Consider bundling your car insurance with your homeowners or renters insurance.
By following these tips, you can save money on car insurance and still protect yourself financially.
Do you have questions about your insurance? Find an insurance agent near you with our Agent Finder
Search All Blogs
Search All Blogs
Read More Blogs
More Than Just a Game: 5 Baseball Movies You Should See
Beyond the diamond: 5 baseball movies that will resonate with you.
The Unsung Hero: Insuring the Value of a Stay-at-Home Parent
Why life insurance is crucial for stay-at-home parents: Protecting your family’s financial future.
Hidden Factors That Impact Your Car Insurance Rates
Beyond the obvious: Factors that impact your car insurance rates.
Poolside Paradise or Poolside Pitfalls? The Realities of Owning a Home Pool
Thinking of buying a home with a pool? Consider these important factors.
Five Must-See American Landmarks: A Journey Through Engineering and History
Explore these iconic American landmarks: From the Gateway Arch to Mount Rushmore.
Small Business Marketing on a Budget: 8 Creative Strategies
Boost your business without breaking the bank: 8 affordable marketing strategies.
Is Your Auto Insurance Outdated? Time for a Policy Review
Save money on car insurance: It’s easier than you think.
How to Avoid Overpaying for Homeowners Insurance
Is your homeowners insurance costing you too much? Learn how to avoid overpaying.
Why Do Kids Love Dinosaurs So Much?
Unlocking the mystery: Why kids are obsessed with dinosaurs.
Exploring the Diverse World of Vegetarianism: A Guide to Different Types
More than just “no meat”: Discover the different types of vegetarian diets.