When should I drop full coverage car insurance?

Full Coverage Car InsuranceYou should only drop full coverage car insurance if you are confident that it makes sense financially to do so. To meet this guideline, typically cars will be older and their resale value will have dropped. Take the time to do the math and find out how the value of your car fares in light of your insurance deductible and the premiums you pay annually.

You need to also be aware of the fact that you should never drop full coverage car insurance if your vehicle is financed. Finance companies require you to carry full coverage in order to protect their investment.

Read on to learn whether you should drop your full coverage auto insurance policy and then make sure that no matter what you decide to do that you enter your zip above for a free online auto insurance comparison!

Calculating Whether or Not To Drop Full Coverage

You will need to look at a variety of factors when trying to decide whether or not to drop full coverage. First you should find out the actual blue book value of your car. Vehicles lose value rather quickly and you may be surprised to find how little your car is actually worth, even after just a few years of use. You also need to know how much your full coverage, beyond what is required by law, costs per year.

To do the math, subtract the amount of your deductible and the amount your beyond-the-basics full coverage insurance is costing you from the present value of your car. How much is left? If the amount is a number that you could not afford to pay out (even if you struggled or tightened your belt a little) then you should probably continue to carry full coverage insurance. However, if the amount is rather insignificant, then you should simply drop full coverage and save the extra amount you would have paid for the coverage in case you need to use it to cover damage from an accident or other type of loss.

Financing Matters

If there is still a lien on your vehicle, this means that you share ownership of it with another entity. Therefore you must carry full coverage so that if your vehicle is damaged, you will have the ability to make the necessary repairs. If you were to drop full coverage from a financed vehicle, the lienholder will likely require you to repay your loan in full right away. If you have done the math and realize that your car’s value and the high cost of full coverage insurance just does not make sense any more, focus on paying off the car in full, so that you can drop the full coverage insurance.

Finding Affordable Full Coverage Car Insurance

If you have determined that you simply can’t drop full coverage car insurance, your next step is to shop around and find the best price possible on it in order to save money. You may even want to raise your deductible on your collision and comprehensive coverage in order to keep your premium low. However, shopping around truly is the key to getting the best price, because the different companies out there offer different rates and discounts and have different rate setting guidelines. That is why when you shop around you will find a variety of prices.

The most efficient way to find affordable full coverage car insurance is to use a free online quote tool. With such a tool you will answer a variety of questions about you, your vehicle and the driving record of everyone in your home and this information will be submitted to companies that offer policies in your area. In a matter of moments you will begin to receive quotes that are easy to compare and contrast. Remember that you need to look at more than just price when you are selecting your new insurer.

Check into the customer service record of the insurers that are offering the best prices. You can get such information through your state’s department of insurance which keeps records of complaints filed against insurers. You can also do an online search for information about the company to find out what customers are saying.

In addition you need to make sure that the insurer is financially stable before purchasing a policy. This will give you peace of mind that they will indeed be able to pay out claims if you need them to. This information can be obtained through one of the independent insurance ratings companies such as A.M. Best, Moody’s or Standard & Poor’s.

Get the information you need to make the right decision on your full coverage car insurance. Start now with our free online quote tool to help you choose the most affordable policy to meet your needs. Enter your zip to start now!

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