My Car is a "Junker"- Lets Drop the Comp and Collision

When to Drop Comp/Collision

One question that I am frequently asked is: "Should I drop 'full coverage?'" Usually, when people refer to 'full coverage,' they are talking about comprehensive and collision coverage. Ultimately, my response is the same for everyone - "It depends." If you lease your vehicle, or if you have a loan for the vehicle, you will not be able to drop the coverage due to contract obligations with your lease/loan company. However, if you own your car, you do have the option to decline comprehensive and collision coverage. Before we explain our answer, lets review what is covered by comprehensive and collision.

• Collision Coverage: Pays for damage to your. car after an accident with an object like a car, pole, guard rail or tree.

• Comprehensive Coverage: Pays for car theft or damage to your vehicle from floods, fire, weather, vandalism, animals, or falling objects.

If and when to consider dropping these coverages

If you are looking for premium savings, dropping these coverages can be beneficial to your wallet. But remember, if you have a claim you will be responsible for repairing your vehicle. It is important to note that you do not need to drop both comprehensive and collision coverage together.

You should only consider dropping these coverages if: (1) you feel financially comfortable paying for a potentially large repair and/or (2) you feel financially comfortable paying a down payment to replace your vehicle. If neither of these options are of interest, then I would suggest keeping the coverage on your policy

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Author: Dale M. Schlegel, Jr. - Principal at Tailored Insurance Solutions, LLC