When Can I Stop Carrying Comprehensive and Collision Coverage on My Car?

Cutting monthly costs effectively involves going through your finances to review what’s helping and what’s not. If you finance a car, it means you’re likely carrying comprehensive car insurance as a loan requirement. Here’s a look at when you can drop comprehensive/ collision coverage to cut monthly bills on car insurance in Calabasas.

Comprehensive Vs. Collision

A comprehensive auto insurance plan is broad by definition, covering nearly everything. It pays for damage from natural disasters such as storms and earthquakes. It also covers fire, vandalism, theft, and all kinds of mishaps except collisions with other vehicles. It will, however, cover accidents in which you hit an animal or when an object hits your vehicle.

Collision insurance, by contrast, mainly covers accidents with other drivers. However, it also covers damage caused by striking objects. It will cover instances like hitting a tree, running over a pothole, or when your car rolls over.

While both comprehensive and collision insurance are optional in the sense that they aren’t required by law, you probably won’t be able to get a car loan without comprehensive insurance. So,  dropping insurance only makes sense if there are no consequences involved.

Both comprehensive and collision insurance come with deductibles and coverage limits that can be set based on your personal needs. If you want to lower monthly costs, you can raise your deductible. However, that means you’ll pay more out of pocket for the initial cost-sharing involved with filing a claim. Once you pay your deductible amount, collision insurance pays the rest.

When to Drop Your Coverage?

In certain cases, you won’t be able to drop collision or comprehensive insurance as and when you want. If you are financing or leasing the vehicle, you must follow your loan or lease requirements. Once you pay off the loan, you’re free to drop either comprehensive or collision coverage. Always consider the mileage and age of your vehicle before deciding to drop the coverage. If your car is at least six years old and has surpassed 100,000 miles, you can drop your comprehensive coverage. Nonetheless, you should also consider the replacement value of the vehicle and its parts.

Note that it’s possible to own a car and not carry comprehensive or collision insurance. Nonetheless, you may need some type of coverage per your state law.

Can I Get Customized Coverage for My Vehicle?

Yes, you can customize your car insurance coverage based on various factors, including how often you drive. If you rarely drive, let your insurer know, and they can cut your monthly payments dramatically. Again, the type of insurance you need is shaped by state regulations. Much of your decision regarding insurance will come down to how valuable your vehicle is.

The idea of dropping car insurance to cut personal costs can work in some situations. However, it’s best to talk to an insurance expert who will help you understand what to expect in the event of an accident. Contact us at Burton A. Harris Insurance Agency for more information on securing the right auto insurance coverage for your needs.