Save Money by Dropping Unnecessary Car Insurance Coverage
By law, drivers in the United States are required to carry some form of car insurance depending on the state they drive in. You can’t drive legally without insurance, yet the premium rates for auto policies are growing faster than inflation. If you want to remain street legal on a budget, you might want to look at auto insurance information in your policy to see if there are any coverages that can be dropped to make your premium cheaper. Here are four types of auto insurance coverage that you might be able to do without.
This insurance covers your vehicle if it is stolen, vandalized, or damaged in a natural disaster. This coverage is usually only required if you are leasing or making payments on a bank loan for your car. Otherwise, if your car is paid off and it is an older model, this coverage is likely unnecessary. Insurance companies are in the business to make money. If you drive an older vehicle that has lost a great deal of its value, even if it is damaged in any of the above situations, they are likely to simply pay you for the value of the car instead of paying for repairs. Comprehensive is expensive coverage to carry if the value of your car is low.
Collision is another type of coverage that is often required for those leasing or making payments on their cars, but not necessary for older, paid off vehicles. With as expensive as this coverage is, if the cost of the yearly premium for collision insurance exceeds 10% of your vehicle’s value, then you might consider dropping this coverage from your policy and applying the money to your savings account instead.
Rental and Towing
Though these coverages aren’t typically very expensive, they are unnecessary in most cases. If your family owns multiple vehicles or you have access to other forms of transportation that negates the need for a rental car if yours in involved in an accident, dropping rental coverage is a good idea. Why pay for coverages that you don’t need? Towing is another coverage that, while convenient, is often only applicable if your car is in an accident and, if the other driver is at fault, their insurance will cover this expense anyway. Drop it and save yourself a few dollars a month.
This coverage is for those that don’t have health insurance or frequently drive with passengers that do not carry their own medical coverage. If you primarily use your vehicle for transportation for yourself and your family and you have a comprehensive health policy, then this coverage is unnecessary and can be dropped.
While you don’t want to go without needed auto insurance coverage, there are ways to slash your premiums and make auto insurance fit into your budget. Knowing your vehicle’s value and avoiding overlapping coverages can save you a lot of money while still keeping you legal on the road.
Disclosure: This is a sponsored post.