Do You Really Need Collision and Comprehensive Coverage?
Car insurance is designed to reduce your costs when you are involved in an accident and are liable for the damages. The insurance is necessary because the damages will certainly outweigh what the average individual can afford. This offers financial protection, and also ensures that the right treatment is given to anyone injured, as well.
Collision insurance protection pays for your vehicle when there is an accident involved. Comprehensive pays for everything else that is not accident related. This would include theft, vandalism, damage from a flood, from animals, etc.
Neither collision protection nor comprehensive coverage is required by most states. On a newer car, or for a rental or lease, it will most likely be required. The companies concerned want to be sure that they will get their money if the car is damaged or destroyed.
The people that probably do not need this coverage are those with older model cars. Chances are very good that if you are driving a car that is eight or nine years old, that you are paying too much for the coverage. In fact, you may be paying more than the car is actually worth each year that you continue the coverage.
Instead of taking this money and giving it to the car insurance company each month, put it into savings toward getting a new car. The only situation where you might want to continue the coverage would be if buying another car and keeping up with new payments would be a near impossibility.
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