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Driving a Car

Making the decision on what coverages to carry for your automobile can be daunting. That is why taking a long look at potential situations and how they can impact you financially is key to determining what you coverages you need. Your Sparks Insurance agent can talk you through the following scenarios to help you in this process.

Do you still have an auto loan?


Lenders almost always ask for full coverage car insurance. They may also have additional requirements for minimum coverage limits, which may be higher than the state mandated limits. Be sure to check the terms of your loan or lease, or call them, to confirm the necessary required coverages.

However, have you paid off your loan? You may think about dropping parts of your coverage like collision and comprehensive insurance. If you only keep liability coverage, you might reduce your auto insurance bills. But, stop and think before you make this decision. You should still figure out if dropping this extra insurance will really save you money in the long run.

Should You Keep Full Coverage on Your Older Car?


You should first make certain you know what different kinds of auto insurance cover. These are very brief definitions:

Liability: Most states require this coverage. It covers the other guy in case you cause an accident. Your policy can assist that driver with repairs or medical needs.

Collision: This pays to fix your car after a wreck if another driver isn't responsible.

Comprehensive: This pays to fix your car after you have a non-accident loss.

You may feel tempted to save money by limiting your insurance to liability coverage. You can see the problem, here. If you do cause an accident, you'll likely still need to pay to fix or replace your car. Also, if your car gets stolen, flooded, or damaged by hail, you won't have an insurer to help pay bills.

When Should You Drop Collision and Comprehensive Insurance?


You need to think about the impact of losing your car. Can you pay the repair bills or to replace a junked car? Could you rely upon other transportation until you can save money to pay the bill? After you wreck your car, you may even need to pay to have it towed and stored until you can fix it.

No matter what, damage to your car will cost money. Having an insurance company to pick up the bills could be something that you take for granted now. You won't take it for granted after you have an accident without that kind of protection.

You might find money-saving advice that tells you to drop full coverage after you pay off your car. If you can put your savings aside in case of an emergency, this might be a good idea. However, always remember that you may not have the money to make full repairs on a moment's notice.

Many people choose to keep full coverage for the peace of mind. It's an individual decision, but you should not make it lightly. If you are still unsure, talk with your experienced Sparks Insurance agent today.

Want more resources to protecting your automobile? Check out the Sparks Insurance Blog for more articles like:


Posted 12:30 PM

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