Relying
Solely on Liability Coverage Isn’t Right for Everyone
By: Edward L. Blais, JD, CIC
President, Blais Insurance
Every
motorist reaches the point when they are weighing the decision to remove
comprehensive and collision coverage from their auto insurance policy. The
decision, it turns out, often comes down to the unique financial situation of
the policyholder. With people holding on to their vehicles for longer, Blais
Insurance would like to share important information that can help you make an
informed decision.
Comprehensive
coverage and collision coverage are protections that cover the cost of repairs
for policyholders’ vehicles for covered causes of loss. While these
coverages are considered optional, policyholders with liens on their vehicles
are required to carry comp and collision coverage to protect the lending
institutions’ financial interests.
Others
without such liens often keep this coverage out of an abundance of caution to
nonetheless protect their investment. To illustrate, imagine that you have
finally paid off the note on your vehicle and its Kelly Blue Book value is
listed at $15,000. If you were to cause an accident or hit a deer, these
coverages could operate to pay to restore your vehicle. In such
instances, it might make sense to maintain the comp and collision coverage
after the loan is paid off.
Alternatively,
if policyholders feel confident they could easily afford to replace their aging
vehicle in the event of an accident without the assistance of the insurance
coverages, they might be better suited to delete the coverages and save the
extra dollars before upgrading to another vehicle. Ultimately, it is up to each
policyholder to decide what their tolerance of risk is.
While
there is no one rule with regards to when to delete comp and collision, policyholders that are considering a change should contact Blais Insurance at
401-725-0070. Speak with our insurance agents to tailor an insurance policy
that makes sense for you and is affordable for your family.
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