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You should drop collision and comprehensive coverage if the premiums exceed 10% of your car’s value and you can afford to repair or replace your vehicle if it’s damaged. You will also need to own your vehicle outright in order to drop collision and comprehensive insurance, since most lenders and lessors require both.
Even if your car isn’t worth very much, it’s typically a good idea to keep collision and comprehensive insurance if you’re not in the financial position to cover expensive repairs yourself. Collision and comprehensive coverage both pay to repair or replace your vehicle, but in different situations:
- Collision insurance applies to damage caused by an accident, regardless of who caused it.
- Comprehensive insurance covers damage caused by something other than a wreck, like vandalism or a natural disaster.
Along with a state’s minimum required coverage, collision and comprehensive insurance make up “full coverage,” which provides complete protection from a financial disaster if something happens to your car.
If you’re not in the position to drop collision and comprehensive coverage, there are other ways for you to make your premium more affordable. For example, you can get a lower rate by raising your deductible, though it’s important to keep it at an amount you can afford. Additionally, you should make sure that you’re getting all of the discounts you’re eligible for.
To learn more, check out WalletHub’s guide to comprehensive vs. collision insurance.
People also ask
Is comprehensive insurance worth it?
Comprehensive insurance is worth it if the premium is a small percentage of the car’s value. Comprehensive insurance might also be worth it if the policyholder cannot afford to replace the vehicle without comprehensive coverage, or if the car is driven or parked in a particularly risky area.
Although comprehensive insurance is not mandatory in any state, dealerships and lenders frequently require comprehensive insurance, along with collision coverage, on leased or financed cars. In...
read full answer by WalletHub, Financial CompanyDo I need to carry comprehensive insurance on an old car?
You don't need to carry comprehensive insurance on an old car, unless you have a financing contract that requires it. Comprehensive coverage becomes less valuable as your car depreciates, so you could drop it. A good way to find out if comprehensive coverage is worth it is to compare the value of your car with the cost of insurance and your deductible.
Should I have full coverage on a 15-year-old car?
You should have full coverage on a 15-year-old car if you can’t afford to repair or replace it out of pocket. On the other hand, you do not need full coverage on a 15-year-old car if you own it outright and will be able to pay for the damage without assistance in the event of a collision or other accident.
In most cases, you can think about dropping full coverage once the cost exceeds 10%...
read full answer by WalletHub, Financial CompanyDid we answer your question?
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@buyhereworld: Yes, if the yearly premium exceeds 10% of your car’s value, then the coverage might not be worth it.
When you say "if the premiums exceed 10% of your car’s value" what time frame are you looking at for the premiums? If the yearly premium exceeds 10% of your car's value? Thank you.