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Check Auto Insurance for Unnecessary Coverage

Auto insurance is very important for multiple reasons. First and most obvious is the legal factor. If a driver wants to stay out of trouble with the state department of motor vehicles and with law enforcement officials, current proof of insurance is necessary. And of course, the protection provided by auto insurance is important regardless of the law. Having insurance protection when you get into a car accident can save you from needless hassle and financial expense. So all in all, carrying auto insurance is a very important thing. But there are certain situations when specific areas of coverage lose their value or are superfluous.

Liability Insurance Always Necessary

Any examination of the usefulness and necessity of auto insurance coverage should start with the liability portion of policies. Liability insurance is always necessary, since it is the one area of coverage consistently demanded by the various state auto insurance laws. Liability insurance is the area of coverage that protects the covered driver from the financial costs of at fault accidents. Therefore it is not an area that should be skimped on in any circumstance. Regardless of what kind of car you drive or how old it is, you need to protect yourself from liability circumstances and the cost of responding to these accidents.

Liability auto insurance should not be an area you make cuts on. In fact, it is a good idea to invest as much money as you can into your liability policy. This area of coverage is the cheapest part of a policy in general, so it is inexpensive to enhance your liability coverage. Prepare yourself for any liability circumstance by making sure this part of your plan protects you sufficiently. Liability might be the single most important part of your coverage because it prepares you for civil cases that sometimes arise in the wake of accidents. Getting ready for these civil concerns ahead of time is extremely valuable and important.

Collision and Comprehensive Protection

Collision and comprehensive insurance are not required by state auto insurance laws, but they are very important in many situations nonetheless. Examining the value of these areas of policies requires an understanding of what they accomplish and the way they protect the insured driver. Collision insurance protects the covered car from damage regardless of liability circumstances. It is set aside toward repairing or replacing a damaged vehicle after a car accident. Collision limits are based on the value of the vehicle. As the vehicle depreciates over time, the real limits of protection covered drivers get in their collision policies also go down.

The same is true of comprehensive protection. Like the collision area of coverage, comprehensive deals with property damage to the covered vehicle. But unlike collision, comprehensive is not concerned with accident damage. Comprehensive essentially picks up where collision leaves off, paying for covered losses in non collision circumstances such as auto theft, vandalism or storm damage. Both collision and comprehensive are extremely important and valuable modes of protection while a car is worth some money or is being finances. In fact, lien holders typically require both collision and comprehensive as long as they still hold a financial stake in the vehicle until the terms of the lien are satisfied.

Diminishing Value of Comprehensive, Collision

But when the car is paid off and owned outright, there are no such requirements. When your vehicle depreciates past a certain point, it is time to consider dropping collision and comprehensive from your policy because in keeping these areas active, you are paying for less and less protection as time goes by. It is better after a certain point to drop these parts of your policy and maybe set the money you save on your insurance aside for the purchase of your next vehicle or for future insurance bills. There is no one set formula for when it might be the right time to drop collision and comprehensive, although experts do have their ideas. When the value you are getting from your premium is outweighed by the price you're paying, it is time to drop collision and comprehensive from your car insurance policy.

There are other areas of coverage to look into in the context of the necessity of coverage. Some plans offer optional towing coverage that some consumers might find unnecessary, for example. Uninsured and underinsured protection is mandatory in some states, but in others is just another option. Think hard before dropping uninsured and underinsured coverage because of the potential value it could bring to your policy. You may also have optional rental insurance or non owned coverage that you are paying extra money for but do not need. Check all the terms of your policy to make sure you are not wasting your money on unnecessary coverage.

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