So here are some ways to save some money on your comprehensive and collision. First off, if your car is getting older and its paid off, you may want to consider dropping them altogether. This is a really good move if your car is worth less than $3000-$4000. While you may sleep better knowing you have full coverage, it may not be the best bet financially. Your deductible is usually going to be $500, and lets assume the best and you are only paying $500 a year for the full coverage part of your insurance.If you were to have an accident you’re already spending $1000 to insure $3000, because you’re paying $500 for the insurance and would have a $500 out of pocket deductible. You would need to have a total loss with your car in the first few years to NOT lose money insuring it. Save your money.
Another strategy along a similar line is to just have comprehensive and not carry collision. If you remember, comp is for things out of your control, collision is essentially just at-fault accidents. If you don’t have many at fault accidents, sometimes its a good option to just drop this coverage and leave comp. The reason being is that collision coverage is very often the single most expensive thing on your auto insurance policy. Comp is usually quite a lot less on its own. So if you have an older car but still want some coverage, or you’re confident in your ability to avoid an at-fault accident and would rather save some money, this might be the best move for you.
One of my favorite options is just simply increasing your deductible for collision. Most people have a $500 deductible for comp and collision. Increasing the comp deductible will not make much of a difference, I don’t suggest it. However, collision is such an large percentage of your policy cost that it quite often makes a large impact on your premium to move it from $500 to $1000. If you have a new car, high performance car, or have had a few accidents before, moving your deductible up to $1000 is likely to save you hundreds of dollars a year. Financially it makes more sense to keep that money in your pocket than to have a lower deductible.
One last thing to consider, if you finance a car you are required to carry comprehensive and collision on it. If you don’t, the bank will add these coverages to your payment for you at a much higher rate than you would pay otherwise, or possibly even repossess the car. If you are a younger driver or have had a few mishaps in the past with accidents, it may just not make financial sense to finance a car. Sometimes even the best available premiums will be more than your car payment. Shop insurance before you buy the car. If you’ve already purchased it and are struggling to pay the insurance every month, it might be better to sell it and buy a low cost vehicle in cash, which would not require you to have comp and collision.
The Beard’s got you covered!