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:
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.
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