insurance riders for your valuables

« Back to Home

When Should You Drop Your Full-Coverage Auto Insurance?

Posted on

Full-coverage auto insurance offers the most protection you can have for your vehicles, but do you need to keep it on all your cars forever? Some people do, but others decide to drop some of their coverages at some point. When is the right time to drop these coverages? Here is an explanation of what full-coverage insurance is and signs that you might want to reduce your policy to a liability-only plan.

The Definition of Full-Coverage Auto Insurance

When you buy car insurance, you can choose the coverage types you have with your plan. If you want the most coverage possible, your agent will suggest a full-coverage policy. Full coverage protects you and your car from most perils, and it includes two key coverage types that you will not receive from a liability-only plan.

The first type is collision, and the second type is comprehensive. These two insurance types have one thing in common — they both cover damages to your own vehicle. If you hit another vehicle while driving, your car might need some repairs. If you have collision coverage, you can file a claim to receive compensation for these needed repairs. If hail damages your car, you can file a claim on your comprehensive coverage for reimbursement. Having both coverage types protects you from almost any situation.

Times to Consider Dropping Your Coverage

You should always keep liability coverage on your auto plan, but you do not always need collision and comprehensive insurance. Before you drop either type, you will need to make sure that this is a wise decision. Here is some advice to help you know when you can consider dropping these coverages:

  • Your vehicle is paid off.
  • Your vehicle is not worth a lot of money.
  • You rarely drive your car.

You cannot drop full-coverage insurance from a vehicle with a loan, as lenders require certain coverage types.

You also have the option of dropping one type and keeping the other. Suppose you live in a rural area and have a high risk of hitting a deer while driving. You could drop your collision coverage and keep your comprehensive, as comprehensive covers deer collisions. Before changing your policy, make sure you understand the cost differences. You can weigh your risks versus the money you can save before deciding.

If you have questions about car insurance, talk to an agent. A car insurance agent can provide you with the best advice for your situation.