When Should I Stop Carrying Comprehensive and Collision Coverage On My Car?

Oct 27, 2021 | Personal Insurance

Owning a car puts you in a position where you have no choice but to carry insurance. The good side to it is that this is your safety net when unforeseeable and unagreeable circumstances happen to you while you are on the road. Buying different types of insurance means that you probably have combinations of different things. This is depending on which state you are residing in or what your insurance company advises you to carry. But when it comes to auto insurance, you might be wondering— when should I stop carrying comprehensive and collision coverage on my car?

Most of the time, it is a combination of comprehensive and collision insurance which may include liability auto insurance, personal injury protection, or PIP, and then there is also the uninsured motorists’ insurance. To note, states do not really require collision and comprehensive coverages but you will find that is of great value to these types of insurances and if you have a vehicle that is a loaner or a lease, these things are most likely a requirement for the protection of the lending company. 

The Difference Between Comprehensive and Collision Insurance 

Both of these insurances are optional and both would take care of the cost of damages to your vehicle. Here are some points on why they are different. 

1. Comprehensive Insurance 

When you mention comprehensive, it is such a big word that means complete and should include nearly every single aspect of anything. 

Acts of Nature

In terms of insurance coverage, this pays for almost all damages done to your vehicle by most things that you can think of including those that come from nature. For example, lightning struck a branch, and by some odd luck the branch breaks and falls onto your vehicle damaging it. Being the owner of the vehicle, you have no control over what happened, and as part of your insurance policy, this one is covered. 

This, when included in your policy, would cover the following too: 

  • Natural disasters like hail storms, earthquakes, and storms
  • Fire 
  • Vandalism 
  • Accidents involving animals 
  • Acts of Terrorism and chaos

Theft

In cases of your vehicle being stolen, replacing it is covered by comprehensive insurance and in cases where say your vehicle is found after it was stolen, the damages will be covered as well. 

Comprehensive Insurance and Deductibles 

This part of the insurance policy normally carries a deductible which is the amount that you would shoulder or your out-of-pocket expenses on top of the cost covered by your insurance provider. Deductibles are normally discussed by you and your insurance agent and are determined by how much you can shed out for this financially. So, if an accident happens and the total damages amount to $1000 and you have a deductible of $300 then the $700 would be covered by the insurance company. 

A good thing that tops the list of benefits that you get from comprehensive coverage would be the peace of mind – that as in or out of your car, you are covered and would be reimbursed for damages ranging from minor to severe. 

2. Collision Insurance 

From the word itself, colliding or crashing into something like a tree or property or with another vehicle. Much like comprehensive, collision insurance is with a deductible that decreases as your premium increases and changes after every evaluation. 

Collision insurance is beneficial as it also gives you peace of mind and eases the burden of expensive costs for repair. In the event that the accident happens, having collision insurance means that you do not have to wait for the insurance of the other party. 

Dropping the Insurance

In cases where a vehicle is leased or is a loaner, you cannot drop collision and comprehensive coverage. While this may be the case for rental vehicles, there is no exact guide as to when you drop your coverage. Generally though, as your car decreases in value each year and you compare it to the increasing cost or replacement for parts and repairs that would soon approach the limit of your premium and your deductible, you may decide on dropping this. 

So when it comes to answering this question, always look into the value of your vehicle through the insurer’s eyes and not the way that you seem to think what its value would be. Insurance providers normally reimburse the value of the vehicle and not for the price tag you might be selling it for. Knowing this fact should tell you that it is almost always less than what you are expecting. 

Deciding on Dropping your Coverage

To make the decision process easier, car owners usually follow the rule that if your car is on or around six years old or that it has reached a good amount of mileage of about 100.000, it is okay to drop the insurance. 

That used to be the case but nowadays, more and more owners and insurance providers suggest that it should be dependent on the value of the vehicle and the cost of its replacement parts. 

What if I still want to keep my car?

This is very understandable because our cars are really an extension of our homes. Giving up a car is not easy for most car owners. Older vehicles that can still be driven but have depreciated so much are computed differently. The reason for this is that what you may be getting as your payout may ultimately be so low – this is the value of your car minus the deductible amount on your car which makes sense that insurance may be too costly over time. 

Is it okay to drop just one type of insurance? 

Knowing the cost of collision and comprehensive insurance coverages and how much the payout is going to be, it actually makes sense to drop one and yes, you can decide on this. Insurance companies would offer both of these to you and most of the time, car owners with vehicles that are more than five or six years old just drop them altogether. A great number of car owners also prefer to keep comprehensive instead of collision. 

In making considerations about your insurance, it is always good to reflect on your current financial status since both insurances are optional and deductibles are totally dependent on how much you are willing to spend. Having both insurances gives the car owner peace of mind but so is having financial stability. Always discuss questions that you may have with your insurance provider and trust yourself to be a good driver on the road. 

In the long run, should you be the kind of driver who keeps their car for a long time, you can weigh the cost of collision and comprehensive against your maximum insurance payout. A payout would be the value of your vehicle minus the deductible. When the time comes that your insurance bill nears the potential insurance payout, it may not be worth it to keep additional coverage

We can help you with that!

Got a question about your car insurance? We’re here to help you understand your coverage. Just call us at (855) 973-1202 or (855) 712-6584 today and a car insurance expert will assist you.