Does Elephant Insurance have full coverage?

Full coverage auto insurance does include both "comprehensive" coverage and "collission" coverage. Collision coverage pays for damages caused by crashing into another vehicle or object or another vehicle crashing into you. Comprehensive coverage pays for damage to your car caused by things other than collission, such as:

• Theft
• Vandalism
• Fire
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• Flood
• Wild animal strikes
• Natural disaster

Although you may be able to purchase comprehensive coverage without collision (such as for a garage-kept collector car), most companies will not sell you collision coverage if you do not also purchase comprehensive coverage.

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You should drop full coverage insurance on your car when the cost of the insurance equals or exceeds the potential payout, should a covered event occur. You may also want to drop full coverage if you are willing to pay for repairs out of pocket, or if you would prefer to replace your vehicle if it’s damaged. … read full answer

For example, an older car with high mileage may not be worth costly repairs, and you might want to save for a new car instead of paying for extra insurance. Similarly, a driver who uses their car infrequently might take the gamble of dropping full coverage, since they are statistically less likely to damage their vehicle.

You should consider dropping full coverage car insurance when...

• Your car is old or has a lot of miles. The less valuable your car is, the less likely it is that you need much coverage beyond your state’s requirements. A good rule of thumb is that when your annual full-coverage payment equals 10% of your car’s value, it’s time to drop the coverage.
• You have a big emergency fund. If you don’t have any savings, car damage might leave you in a severe bind. In that case, the money you spend on full coverage insurance will protect you from insurmountable repair bills. Consider keeping your full coverage insurance until you have some savings built up.

For those who aren’t quite sure what it means exactly, “full coverage” is a catch-all term for insurance that covers you, other drivers, and your vehicles. It generally includes both collision and non-collision insurance. In other words, there is no single policy for "full coverage" car insurance. Instead, you select a combination of coverages that you feel is enough to handle all aspects of a car collision. With a well-rounded collection of coverages, you are “fully” protected from a variety of vehicular hazards, ranging from injuries and collision damage to weather events, encounters with wildlife, and vandalism.

However, it’s important to remember that different states require different levels of coverage. Make sure to check state requirements before making any changes to an insurance policy.

With that being said, it’s wise to get full coverage for a new, rare, or expensive car. A $40,000 truck is worth the few hundred dollars a year for full coverage insurance, for example. Otherwise, you run the risk of having to drop another $40,000 on a new truck if you’re involved in a serious accident.

You should drop your collision insurance when your annual premium equals 10% of your car's value. If your collision insurance costs $100 total per year, for example, drop the coverage when your car is worth $1,000 since, at that point, your insurance payments are too close to your car's value to be worthwhile. Drivers can easily find a car’s value with the online vehicle appraisal calculators from Edmunds or Kelly Blue Book.… read full answer

When to Drop Collision Insurance

When you rarely use your car

The more you drive, the higher your risk of being in an accident – so if you don’t drive often, your risk is lower than average. That means you could be paying for collision insurance that you’re unlikely to need.

When repairing a car would not have a big impact on your finances

Maybe you have an emergency fund that you could use to fix your vehicle. If you're willing to spend your savings on car repairs, then it's safe to drop collision insurance. However, people often prefer their emergency fund to be a safety net for when they leave their job, face health issues, or need home repairs. It all depends on what you're comfortable with personally and how much you have saved.

When you’re paying 10% of your car’s value in premiums annually

The cost of repairs goes down as your car gets older, so you don’t want to overpay as your car loses value.

Other Things to Consider Before Dropping Collision Insurance

The 10% rule for dropping collision insurance is not set in stone. But it’s a good milestone to keep in mind because as the value of a vehicle falls over time, the value of its insurance coverage does too. And when you start paying a significant portion of your car’s value in premiums each year, you’re simply overpaying to offset the actual level of risk that remains – at least as far as collision damage to your own vehicle is concerned.

Collision insurance repairs or replaces your insured car if it's damaged, whether by another vehicle or an object like a tree or mailbox. This insurance covers up to the cash value of your car - which is where the 10% rule comes in. This rule most frequently applies to older cars or vehicles with a lot of mileage, as they are worth relatively low amounts. There are a few other situations where it might be a smart move to drop collision insurance, too.

When Not to Drop Collision Insurance

Every state requires car insurance except for New Hampshire and Virginia. However, the law doesn't mandate collision insurance. The only legally-mandated car insurance is liability coverage, for damages to someone or something that you accidentally hit with your car. Although collision insurance is optional, it's well worth purchasing for many people.

If you're financing your car, collision insurance is usually required. Otherwise, you might be stuck with a repair bill equivalent to the value of your new vehicle! If you're leasing your car, the same logic applies – most lessors require drivers to carry collision insurance, too.

In summary, it's a smart money move to drop collision insurance when your car is old or has high mileage, but you should definitely think twice about doing so.