Comprehensive and collision are two types of auto coverage that are often optional. Many states require people to have liability insurance, but not necessarily comprehensive or collision.
Effective Coverage policyholders who have both an auto and renters insurance policy often ask us if they should drop collision coverage from their policies. If you have an older vehicle, you may be thinking about dropping comprehensive and collision coverage from your policy to save money.
Before you drop either comprehensive or collision coverage, you must understand exactly what the coverage provides. There might be more practical ways for you to save money on your car insurance.
What is comprehensive coverage?
Comprehensive coverage pays for damage that occurs as a result of something other than an accident, like weather damage, hitting a deer, theft, or vandalism. Comprehensive will not cover any damage that is the result of a collision.
Comprehensive coverage may be a good idea for you for a few different reasons, or it may not. If you live in a city and often have to park your car on a street (instead of in a garage), then it makes sense that your car maybe more exposed to the risk of theft, for example. Because of this, comprehensive coverage might be a good idea for you. Another example of comprehensive coverage coming to the rescue is after a hailstorm. You might realize after a hailstorm that your car has 30 small dents on the hood, roof, and trunk. Your auto policy does provide coverage, but you will have to pay your deductible.
A general guideline for whether or not comprehensive coverage is a good idea for you takes the overall value of the car into account. If the annual cost of your comprehensive coverage is more than 10% of the value of the vehicle, it might not be worth covering.
What is collision coverage?
Collision coverage pays for damage that occurs during an accident. If you hit another car, another car hits you, or you hit a fixed object, collision coverage will pay for damage to your vehicle. You should have collision coverage if you have a new car that is expensive, you have a loan on a car, or you cannot afford to repair the vehicle in the case of an accident.
How much does comprehensive and collision coverage cost?
Collision coverage is one of the more expensive types of coverage, but comprehensive is on the lower end of the price spectrum. Before you drop either coverage entirely, consider raising your deductible. If you feel comfortable paying a little more in the event of a claim, raising your deductible is an easy way to save some money on your monthly insurance premium. You can also try bundling your car insurance with your renters insurance policy to get savings on both.
If you would like a complete review of your auto insurance policy, call an Effective Coverage insurance expert today.
We’d be happy to help you find out if you are getting the best price and the best coverage possible on your insurance. Submitting your information takes only seconds and could potentially save you quite a bit of money. Just call (800)892-4308 or click to get covered - whether you need renters insurance quotes online or coverage anywhere else!
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