Call it an insurance conundrum: we all want to make sure we have the right amount of auto insurance protection, but we also want to pay as little as possible for that coverage. Fair enough. Unfortunately, it doesn’t always play out that way. So what can you do?
One of the things you might want to consider is whether or not it’s necessary to have certain types of coverage as part of your policy, such as collision and comprehensive.
What Is Collision Coverage?
Collision coverage is optional. It protects you for damages to your vehicle if you are in a car accident. It pays for the damage to your car or truck regardless of who is at fault for an accident. It also provides coverage for a hit-and-run should that happen.
If your vehicle is more than 10 years old, and you don’t think it’s of much value, then you may feel that it’s not worth the amount you’re paying for collision coverage in your overall premium. So, if your car is only worth around $2,000, and your collision coverage deductible is $1,000, you might want to drop the coverage and go without it.
There isn’t a set benchmark for when collision coverage is no longer needed. Think of it this way: if you get into an accident and your vehicle needs repairs, how much will it cost, and can you afford to pay for the repairs yourself?
Also, keep in mind how often and where you drive. For instance, if you drive your car in urban areas or on highways regularly, or if you drive it during the winter when road conditions are dodgy, you might want to retain your collision protection.
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What Is Comprehensive Coverage?
Most people think “comprehensive” means you’re covered for everything under the sun, but that’s incorrect.
Insofar as auto insurance is concerned, comprehensive coverage pertains to covering damages resulting from certain risks or perils such as theft, vandalism, fire, hail, and falling or flying objects (like a rock flying off the back of a dump truck and cracking your windshield). It too is an optional coverage you can add to your overall policy.
Typically, comprehensive coverage isn’t expensive, even for older vehicles. And let’s face it, you never know when something bad can happen like a tree falling on your parked car, and it needs to be repaired. There’s a deductible involved with comprehensive coverage as well, but whether or not you decide to keep this kind of protection may come down to how much you value your vehicle.
Moreover, where do you usually park it? Do you have a private garage to park it in, or is your car typically parked in a public lot or on the street? Is yours a safe neighbourhood or is theft or vandalism a frequent problem? All of these factors come into play when making a call on whether you should keep comprehensive coverage on your car or not.
How to Make an Informed Decision About Collision and Comprehensive Coverages
After mulling over the possibilities and running the numbers, if you’re still not sure if you should keep or lose your collision and comprehensive coverages, give your broker a call and ask their opinion. To get a clearer picture of how these optional coverage types add up, take a couple of minutes to get a car insurance quote for free to see what the differences are.