Dropping ‘Full Coverage’ May Save You Money
If you’re looking for ways to reduce your auto insurance costs, you may want to consider dumping or reducing either your collision or comprehensive coverage — or both of them. Collision reimburses you for the costs involved in repairing or replacing your car after an accident. Comprehensive reimburses you for the costs associated with repairing your car after it has been damaged by natural causes, vandalism or theft. Keeping collision and comprehensive coverage, or “full coverage,” depends on your car’s value and your financial situation. Determine your insurance needs, before you apply for auto insurance quotes.
Older cars
Having an older car, may save you money on your auto insurance premiums. You may no longer need collision and comprehensive coverage. If the cost of your collision and comprehensive is more than 10 percent of your car’s Blue Book value, it may make financial sense to drop these optional coverages. Many cars reach this point, after five years. According to the Insurance Information Institute, if your car is worth less than $1,000, any payment you may receive on a claim would not substantially exceed your premiums, after subtracting your deductible.
Car value
You can get an estimate of your vehicle’s current value at Kelley Blue Book’s Web site, www.kkb.com, or Edmunds’ Web site, www.edmunds.com. You can also ask auto dealers and your banker for your car’s worth. However, insurance companies don’t rely on the standard Kelley Blue Book or National Association of Automobile Dealers value of your car. Every insurer makes its own proprietary list of car values. They take into consideration the car’s mileage, its pre-accident condition and where you live. Your insurance company may also ask local dealers what they’d ask for a similar car. Be aware that your car may be worth less than you think, when you apply for auto insurance quotes.
Higher deductibles
With collision and comprehensive coverage, the lower the deductible, the more you will pay for your policy. The higher the deductible, the more you will pay for out-of-pocket expenses, after filing a claim. Even with a higher deductible, you may save money in the long run. Remember that the purpose of insurance is to protect you against big losses, not cover all your losses.
When you are ready to buy a new car policy, you can call agents in your local area, contact insurance companies directly or use InsuranceQuotes.com to instantly get competitive auto insurance quotes from the nation’s leading insurance providers. Simply fill out a simple online form on InsuranceQuotes.com to find the right insurance coverage at the best possible price. Take the time to protect you and your family today.
