In the United States, car insurance offers liability, collision and comprehensive coverage. New Hampshire and Wisconsin are the only two states that do not require liability on your car insurance. All other states require minimum liability that includes bodily injury for each person in the accident and property-damage liability for the first accident. Collision covers the damage done to your car from an auto accident. Comprehensive coverage is for reimbursement for theft or other non-collision damage such as fire.

When to Drop

When you car is an older model, and your deductible and premium are close to the estimated worth of your car, you can consider dropping comprehensive coverage. The prevailing thought is that as your vehicle ages, it loses value. This results in the insurance company paying you less for replacement value. It is your call to determine if you want to continue paying for comprehensive coverage on an older vehicle. If you have an unpaid loan or leasing the vehicle, you might be required to continue keeping this coverage. After your car loan is paid off, you can consider dropping your comprehensive coverage. If you park in a garage, you can consider dropping comprehensive coverage.

Benefits of Comprehensive Coverage

Should your car be stolen or badly damaged in something that is not a collision, and you no longer carry comprehensive, you will be completely responsible for the loss.. Carrying comprehensive insurance is wise until you are able to cover the cost of replacement or damages. Before dropping comprehensive coverage, make sure you consider if you are able to cover those financial risks. If you live in a high-risk neighborhood, keeping comprehensive damage will cover your car if it should be stolen. If your car's value is high, it is worth your investment to keep your comprehensive coverage.

Facts

Comprehensive coverage covers only non-collision damage. Comprehensive coverage covers the cost of the automobile but not your personal contents inside your car. If you have expensive stereo or GPS systems, insure separately. If your car is damaged by high winds, fire or flood, comprehensive coverage will cover the repairs. Comprehensive coverage is strictly for providing protection from physical damage that is not related to motor vehicle accidents.

Source:

Edmunds

Al