If you pay off your car loan, you can adjust your car insurance policy. When you no longer owe money on a vehicle, you will not have a lender controlling your insurance coverage requirements. Many people update their policies at this time to save money. One way you can save money is by removing your comprehensive coverage. Should you do this, though? Before you rush into dropping this coverage, you might want to think it through. Here are several things to understand about comprehensive coverage that you should know before dropping it.
The Things It Covers
The first thing to know is what comprehensive insurance covers. Comprehensive insurance covers your car from damage that you cannot control. For example, if you hit a deer while driving, your comprehensive covers the damage. This insurance type also covers damage from storms, including hail and wind, and it protects you from theft and vandalism damage. If your car catches on fire, it will also protect you. As you can see, comprehensive insurance offers a lot of protection for you, and it is a beneficial coverage type to have.
How It Works If You File a Claim
When you buy auto insurance with comprehensive coverage, you will get to choose your deductible. If you experience vehicle damage from a covered peril, you can file a claim for it. If the damage total is $3,000, you must pay your deductible, while your insurance provider pays the rest. If your deductible is $1,000, you will pay this, and the insurance company pays the remaining $2,000.
The Risks You Take by Not Having It
If you do not have comprehensive coverage, you will have to pay the bills for repairs if your vehicle gets damaged. For example, if you experience $2,000 of hail damage to your car, you would be responsible for paying the full amount if you want to repair your car. The perils that comprehensive insurance covers are things you cannot control, yet they can cause thousands of dollars of damage. If you do not want to take these risks, make sure that your auto policy includes this coverage.
While you are free to drop this coverage type if you choose, it might not be a wise move. Comprehensive coverage protects you from all kinds of events, and it is helpful to have when you need it. If you have questions about your policy, contact an insurance agent today.