Two Circumstances When Comprehensive Coverage Is Not Needed
For most people, when they look for auto insurance quotes, they look for comprehensive coverage. This coverage will replace the value of the car for non-accident type incidents, like flooding or if the car is stolen; the insured receives a check for the value of the automobile, and can then purchase a new vehicle. Many car owners find this to be a necessity in their policy, but not everyone should have this coverage. There are instances where the additional cost of the comprehensive coverage will add up to more over time than it would cost to replace the vehicle.
Comprehensive coverage helps to protect owners who have cars that would be financially difficult to replace. An automobile owner with a newer car or a car with a lease or loan on it will most likely be required to have this coverage; lien holders want to know that their investment is protected, regardless of the age or the condition of the car. However, someone that has paid off their loan and has an older car that is not very valuable would probably not benefit from this coverage. The value of older vehicles declines to the point that the overall cost of the policy will be more than the car is worth; in this case, putting the money in savings would most likely benefit the car owner more than paying in on the policy.
The overall condition of the vehicle is also a factor in balancing the benefit of comprehensive coverage. When a car is in poor condition, this can also drive down the overall value of the vehicle regardless of the overall age. Again, consumers have to balance the true value of the vehicle with the overall cost of the policy. There may be more value in setting money aside in a separate account than paying an insurance company for comprehensive coverage on a vehicle that wouldn’t be monetarily valued very highly.
Auto insurance quotes include many different types of coverage, but not all of them may apply to any given vehicle. Comprehensive coverage is an excellent option for cars that are newer, and may be a requirement for vehicles that are still being paid off through a loan or a lease; the coverage protects the consumer and the lender from non collision incidents. If a vehicle is older or in poor shape, the coverage may not be the best option; eliminating it from an auto insurance quote will help to lower the price of the policy and save the customer money. Customers should look for the right balance of coverage and cost to get the best value from their auto insurance.