Want to Drop Your Full Coverage Auto Insurance? Here’s What You Need to Know

Before dropping your full coverage auto insurance, compare the risk involved against your financial situation. Also, consider the type of car you drive and how much you’re capable of paying out of pocket to repair or replace your car after an accident or theft.

Here’s a look at a few other crucial considerations.

Components of Full Coverage

Auto liability insurance is the minimum coverage requirement for drivers in most states. The policy covers car accident-related bodily injuries and property damage suffered by third parties when the policyholder is at fault. The other policies you need to achieve full coverage include:

  • Comprehensive insurance:

    Covers theft of your car and non-collision damage caused by vandalism, fire, natural disasters, etc.

  • Collision coverage:

    Helps pay for the repair or replacement of your car after a crash involving another vehicle or object.

  • Uninsured/underinsured motorist:

    Some full-coverage policyholders include this component for property damage or bodily injury protection when the at-fault driver has no or insufficient auto liability insurance.

  • Personal injury protection (PIP):

    This policy may be mandatory or optional, depending on where you live. It covers medical bills and other related costs that you or your passengers incur in an auto accident.

  • Gap insurance:

    This optional policy is useful when you have an auto loan. It covers the difference between the actual cash value of your stolen or damaged car and the loan amount you owe the lender.

When to Drop Full Coverage?

Consider dropping some components of your auto insurance if:

  • The value of your car is lower than full coverage costs
  • You can afford the out-of-pocket costs of repairing or replacing your car after an accident
  • You can’t afford full coverage

When to Keep Full Coverage?

Full coverage auto insurance can be useful in scenarios such as:

  • You have an auto loan and need to maintain comprehensive and collision policies until you’ve paid off the debt
  • Your car is new and would be costly to repair or replace after theft or an accident
  • Your car is a collectible with significant resale value

When to Drop Comprehensive or Collision Coverages?

You may want to drop these optional coverages if:

  • You have a home garage that shields your car from damage
  • You would rather replace your car if it ever requires major repair
  • You can afford a new car if the current one is stolen or damaged in an accident

Other Things to Consider

  • Your vehicle’s value may not be what you expect it to be

    The higher the mileage, the lower the value of the car. This is why the value of a high-mileage car is sometimes not worth full insurance coverage costs.

  • Consider the deductible

    Your comprehensive or collision insurance deductible shouldn’t be more than the value of your car. Otherwise, you should drop the optional coverages.

  • Know if you are a safe driver

    Safe driving habits and low mileage can reduce the risk of damaging your car in a crash.

If you’re looking for an auto insurance policy that fits your budget, contact our experts at Burton A. Harris Insurance Agency today. We are happy to help you find cost-effective coverage for your car.