Do you need Collision and Comprehensive Insurance? Premiums

You may not need to carry comprehensive orpotential payment you might get from your insurance
collision insurance. If you still have an unpaid loan oncompany. If you own your auto free and clear you
your car, the contract you have with your lender willcan ask your insurance company to drop or reduce
force you to carry these coverage types. If youthe coverage.
have paid off your automobile, you can decide toYou can reduce your collision coverage by reducing
keep or drop these aspects of your policy. You canyour coverage. This will lower therates and still give
reduce your automobile insurance premiums if youyou some protection. Your lender or leaser may allow
remove or lower these parts of your insuranceyou to raise the deductible since this protects their
policy's protection.interests to some degree.
Collision insurance can compensate you for damagesWhy Should You Drop Comprehensive Insurance?
that occur when a covered auto hits or is hit byThe thought process behind dropping or reducing car
another auto. It can also compensate you for yourcomprehensive insurance is the same as the thinking
car's damages when your insured car hits aassociated with dropping collision insurance. However,
something other than a vehicle such as a Jerseysince the cost for comprehensive insurance is less
barrier.than the cost of collision insurance, you may want to
Comprehensive insurance is also known as "Otherkeep it even after you have dropped your collision
than Collision." This portion of your automobilecoverage.
insurance policy pays for damages caused by flood,If your auto is leased or you have a lien on it, you
vandalism, contact with birds or animals, etc..may not be able to drop the coverage. However the
Since both collision insurance and comprehensiveleaser or lien holder may allow you to reduce the
insurance compensate you for damage to your autocoverage by raising your deductible. This will reduce
and not someone else's, you get to decide whetheryour rates, although not as much as completely
or not to drop these from your policy. However, ifdropping the coverage would.
your automobile is leased, or you have a lien on yourMost cars lose value as they get older. This reduces
car, you probably will not be able to do so becausethe amount of money that an insurance company is
the actual owner of the automobile or the lender willlikely to pay to repair or replace a automobile. At
want their interests protected.some point you may feel that the amount of
The liability portion of your vehicle insurance policy ispremium your auto's collision or comprehensive
the primary part of the policy that pays others forcoverage adds to your auto insurance bill is too much.
their damages. If you run into another auto and youExactly when that point comes is determined by
don't have collision insurance, it won't matter sinceyour personal comfort level with risk.
your liability coverage will pay the other party.Eliminating comprehensive insurance coverage and/or
Why Should You Drop Collision Insurance?collision coverage means that you take more risk. If
The premiums for this portion of your vehicleyour feel that you are unlikely to have an at fault
insurance policy may be more than you want to pay.accident because you are a good driver this may
If your automobile is totaled, the insurance companymake sense for you. If you garage your auto your
will only pay you its book value. At some point, youcar is perhaps less likely to be impacted by the perils
may feel that the amount the insurance companythat other than collision coverage protects you
might pay has diminished enough that the cost of theagainst. If this is true, you may want to drop the
collision insurance is no longer justified by thecoverage.