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Many consumers do not realize that they can save a lot of money on car insurance by dropping certain coverages without having to take a big additional risk financially. In particular, it is often not necessary for many consumers to maintain collision and comprehensive auto insurance coverages. Keep in mind that some consumers need to keep both of these coverages. On the other hand, many can get rid of them and save some money. That is why it is well worth it for consumers to do a bit of research to see if they really need to keep their collision and comprehensive coverages. First of all, the consumer needs to figure out if the vehicle is still under an auto loan or lease. If there is an outstanding loan or lease on the car, it is necessary for the consumer to keep full coverage on their automobiles including collision and comprehensive. It is likely that the auto loan or least contract requires that owners maintain an adequate amount of collision and comprehensive coverage. That is why those who have an outstanding auto loan or lease need to maintain this coverage to avoid violating the terms of the loan or lease. It doesn't matter how much or how little the car is worth. The consumer needs to maintain collision and comprehensive until the loan or lease is paid off. If there is no loan or lease on the vehicle, the next thing to do is to find out the current market value of the vehicle. This is the maximum amount of money that the auto insurer will pay on a comprehensive or collision claim. The insurance company will not pay anymore than this amount. Even if the consumer paid a lot more to buy the car, the insurer won't pay more than the market value. In most cases, the insurance company will pay far less than the current market value. When purchasing car insurance, consumers need to pick a deductible for the collision and comprehensive car insurance. This is the amount that the consumer is responsible for prior to the insurance company paying any amount on a claim. The deductible is the reason why most consumers will get far less than the market value of the vehicle in a collision or comprehensive claim. Ultimately, the maximum amount that can be claimed in a comprehensive or collision claim on car insurance is the current market value of the vehicle minus the deductible. Consumers will also want to consider the premiums paid for the comprehensive and collision coverages during the last billing period as well. When the latest premiums and the deductible are included, the check given to the consumer for a totaled car under a comprehensive or collision policy may be very little. That is why it is often not worth it for a consumer to keep comprehensive and collision coverage on vehicles with a low market value. Vehicles that have a lot of pre-existing damage may have even less value than the official estimates. Insurance companies will deduct for pre-existing damage. Keep in mind that it is well worth it for consumers driving high value vehicles to keep comprehensive and collision coverages on car insurance. Not having this coverage could expose the consumer to a four or five figure replacement cost on a vehicle. That is why most people with newer cars will want to maintain adequate comprehensive and collision coverage. Keep in mind that both of these coverages will pay consumers regardless of who was at fault for the accident. On the other hand, those with cars that have little value don't have much upside if there is a claim. That is why those with old cars should consider getting rid of collision and comprehensive coverage.
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