About Auto Insurance: Dropping Your Monthly Costs for Collision and Comprehensive Automobile Insurance Costs Posted By : Alston J. Balkcom

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Dropping Your Monthly Costs for Collision and Comprehensive Automobile Insurance CostsBy: Alston J. Balkcom

[ Posted On: 2010-02-22 ]
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Collision and Comprehensive insurance are optional car insurance coverages. If you still have chattel mortgate or lien against your car, the contract you have with your lien holder may force you to carry this type of protection. If you have paid off your auto, you can decide to keep or drop these aspects of your policy. You can shrink your auto insurance premiums if you remove or lower these parts of your insurance policy's protection.

Collision insurance can compensate you for the cost to repair your vehicle when a covered car hits or is hit by another automobile. It can also pay for damages that occur when a covered auto hits a something other than a vehicle such as a road sign or a tree.

Comprehensive insurance is also known as "Other than Collision." This type of coverage pays for damages caused by flood, vandalism, contact with birds or animals, etc..

Since both collision insurance and comprehensive insurance pay for damage to your vehicle and not someone else's, you are allowed to decide whether or not to drop these from your policy. However, if your auto is leased, or you have a lien on your auto, you probably will not be able to do so because the actual owner of the car or the lien holder will want their interests protected.

The liability portion of your vehicle insurance policy is the primary portion of the policy that pays others for their damages. If you collide with another vehicle and you don't have collision insurance, that fact will not impact the amount of money the other party might get.

Why Should You Eliminate Collision Insurance?

The rates for this aspect of your automobile insurance coverage may be more than you want to pay. If your vehicle is totaled, the insurance company will only pay you its book value. At some point, you may feel that the potential return has diminished enough that thepremiums of the collision insurance is no longer justified by the potential payment you might get from your insurance company. If you own your auto free and clear you can ask your insurance company to drop or reduce the coverage.

You can reduce your collision coverage by reducing your coverage. This will shrink thepremiums and still give you some protection. Your lender or leaser may allow you to raise the deductible up to a specified limit.

Why Should You Drop Comprehensive Insurance?

The thinking behind cutting or reducing vehicle comprehensive insurance is the same as the logic associated with removing collision insurance. However, since the cost for comprehensive insurance is less than the cost of collision insurance, you may want to keep it even after you have dropped your collision coverage.

If your vehicle is leased or you have a lien on it, you may not be able to drop the coverage. However the leaser or lender may allow you to reduce the coverage by raising your deductible. This will reduce your rates, although not as much as completely eliminating the coverage would.

Most autos lose value when they get older. This reduces the amount of money that an insurance company is likely to pay to repair or replace a automobile. At some point you may feel that the amount of premium your auto's collision or comprehensive coverage adds to your automobile insurance bill is too much. Exactly when that point comes is determined by your personal comfort level with risk.

Removing comprehensive insurance coverage and/or collision coverage means that you take more risk. If your feel that you are unlikely to have an at fault accident since you drive safely you may feel that you can take this risk. If you garage your vehicle your car is perhaps less likely to be stolen or vandalized. If this is the case, you may want to take these risks as well.

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About The Author: Alston J. Balkcom -- has been a licensed insurance agent for almost a quarter of a century. He now manages several insurance-related websites. Blue Cross health insurance quotes information on his sites. His latest blog posts include When Should I Cancel Collision Insurance? before and after the --> | View Profile & All Articles By: Alston J. Balkcom |

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