Reducing Your Monthly Rates For Collision And Comprehensive Car Insurance

Collision and Comprehensive insurance are optional car insurance coverages. If you still have a lien against your automobile, the contract you have with your lender will force you to carry these coverage types. If you have paid off your vehicle, you can decide to keep or drop these aspects of your policy. You can shrink your auto insurance premiums if you remove or reduce these parts of your insurance policy's protection.Collision insurance can pay for the cost to repair your car when your insured vehicle hits or is hit by another vehicle. It can also pay for your car's damages when your insured car hits a fixed object such as a firehydrant. Comprehensive insurance is also known as "Other than Collision." This portion of your auto insurance policy pays for damages caused by falling objects, fire, theft, explosion, windstorm, hail, water, flood, vandalism, riot or civil commotion, contact with bird or animal, and breakage of glass.Since both collision insurance and comprehensive insurance compensate you 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 vehicle is leased, or you have a lien on your automobile, you probably will not be able to do so because the actual owner of the automobile or the lender will want their interests protected. The liability portion of your auto insurance policy is the primary portion of the policy that pays others for their damages. If you collide with another vehicle and you don't have collision insurance, it won't matter since your liability coverage will pay the other party. Why Should You Drop Collision Insurance? The premiums for this part of your car insurance policy 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 book value has dropped enough that the cost of the collision insurance is no longer justified by the potential payment you might get from your insurance company. If you own your vehicle free and clear you can ask your insurance company to drop or reduce the coverage. You can reduce your collision coverage by raising the deductible. This will slash thepremiums and still give you some protection. Your lender or leaser may allow you to raise the deductible up to a specified limit. Why Should You Drop Comprehensive Insurance? The thinking behind dropping or reducing automobile comprehensive insurance is the same as the logic 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 lender may allow you to reduce the coverage by raising your deductible. This will reduce your expenses, although not as much as completely eliminating the coverage would. Most cars lose value when they get older. This reduces the amount of money that an insurance company is likely to pay to repair or replace a vehicle. At some point you may feel that the amount of premium your car's collision or comprehensive coverage adds to your vehicle insurance bill is too much. Exactly when that point comes is determined by your personal comfort level with risk.Dropping 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 have a good driving record you may feel that you can take this risk. If you garage your car your auto is perhaps less likely to be stolen or vandalized. If this is true, you may want to take these risks as well.

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Autos & Vehicles

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