Thursday, July 18, 2019

When Should You Delete Comp and Collision?


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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