Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Sep 21, 2020

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Here's what you need to know...

  • You’ll have to pay a deductible before the insurance company pays for any damages
  • Many people who buy new vehicles use auto loans to help acquire them
  • Most auto lenders require you to have collision and comprehensive coverage

Buying liability, collision and comprehensive insurance for your vehicle provide you with the ultimate level of protection to help you avoid being financially responsible for damage associated with your vehicle.

While many car owners get all of these coverage options as part of their policies, getting rid of comprehensive coverage at some point can help save money.

If you’re thinking about getting rid of your comprehensive insurance, there are a few different factors that you should consider.

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Table of Contents

Why do you need comprehensive?

Comprehensive insurance is a type of coverage that protects your car from random types of damage that are not associated with hitting another vehicle.

This is the part of your policy that’s like a “catch-all” coverage that gives you a versatile type of protection.

If your car is sitting next to a building that’s on fire and catches on fire, your comprehensive coverage should reimburse you for damages.

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Paying Off Your Loan

Many people who buy new vehicles use auto loans to help acquire them.

These loans can last five years or more and the lenders who issue them have a financial interest in the cars.

Because of this, most auto lenders require you to have collision and comprehensive coverage so that your vehicle is protected.

Many people remove comprehensive coverage because they are no longer required to carry it by the lender.

If your car is damaged in some way, the insurance company will pay to bring it back to its previous value.

This way, if the lender has to repossess the car for some reason, it will be able to get what is owed against it by selling the car.

Older Vehicles

Most vehicles depreciate rapidly over time. When you own your car for several years, its value may fall substantially.

When this happens, you may not find it necessary to pay expensive insurance premiums just so that you can have full coverage auto insurance.

In this situation, you have to weigh whether the premiums that you pay are worth the benefits that you can receive from the policy.

For example, if the value of your car is only $1,000, paying $100 per month for your auto insurance premiums may not make much sense.

By the time your deductible amount gets close to the value of your car, it may be to your advantage to drop comprehensive coverage. We have other helpful tips for used car insurance.

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Making the Decision

There is not a specific time that it makes sense to drop comprehensive coverage. Some people prefer to drop it right when they no longer have an auto loan balance.

Others would prefer to keep it a little longer until the value of their car declines significantly.

Some drivers even hold it until the value of their car gets down to their deductible amount.

When making the decision, you have to look at how much money you have in savings and how much you can afford to pay for repairs.

If you don’t keep much money in savings, having a low deductible and keeping your comprehensive insurance might make sense.

If you have a significant amount of money in savings, it may be to your advantage to drop your comprehensive coverage.

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Shopping for Coverage

If you are fed up with paying too much for auto insurance, then dropping your comprehensive coverage may not be the best option.

In some cases, it might be better to shop around and see if you can get cheaper insurance coverage.

Sometimes, you can get a full coverage policy for a cheaper rate than what you’re paying, and you won’t have to get rid of your comprehensive or collision coverage.

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References:

  1. https://www.thebalance.com/comprehensive-insurance-coverage-2645753
  2. https://www.allstate.com/tools-and-resources/car-insurance/what-is-full-coverage.aspx
  3. https://www.statefarm.com/simple-insights/saving/these-7-factors-determine-car-insurance-premiums
  4. https://www.statefarm.com/finances/banking/loans/vehicles
  5. https://www.libertymutual.com/auto/car-insurance-coverage/collision-insurance