You may be extremely sure of your driving experience and skills, but even the best driver could make a mistake. Comprehensive and collision insurance can help cover expenses in an unfortunate incident. But there is an essential difference between these coverages. When an accident happens, Collision coverage covers any damage to your car. On the other hand, Comprehensive coverage protects you from other events unrelated to accidents, such as natural disasters, fallen trees, robbery, etc.
Undoubtedly, complete coverage includes full and collision coverage. But still, many people prefer not to add them to their insurance policy, especially if they drive an old, cheap car.
When Will You Be Required To Buy Comprehensive Or Collision Coverage?
In some cases, comprehensive and collision coverages are required. For example, if you rent your vehicle, you will be required to include collision and comprehensive coverage. In this case, you do not own the car completely, so the bank or dealership requires a warranty. You can drop comprehensive and collision coverage later when the vehicle has been fully paid.
When Is It Convenient To Remove Comprehensive and Collision Coverage From Your Policy?
Good protection is what we most want when buying car insurance now pay later. Many people get comprehensive collision coverage if they have the necessary resources. And that is right, comprehensive and collision coverages are usually a good chance. But it’s not always like this. Sometimes it is better to drop these coverages. This way, you will save good money on insurance premiums.
Indeed, one day, you will realize that it is not necessary to have such a complete car insurance policy when the car you drive is cheap and old. Not worth spending money to repair an old car with extensive damage due to the accident. But it all depends on your needs. The options are simple. Pay more now for better coverage, or don’t make that extra expense, but pay attention to the consequences later.
Keep in mind the 10% rule
Get to know the 10% rule, and you can decide better on this matter. If the additional, comprehensive, and collision coverage premiums are higher than 10% of the vehicle’s value, then it is better to exclude that coverage.
For example, dropping comprehensive and collision coverage is a good idea if it costs $320 per year when your car is worth $3000. And as we said before, if you don’t have enough money to buy comprehensive and collision insurance, you should also drop these coverages. And, of course, drop this insurance coverage if you feel well at the risk of doing so.