Tom's Blog
It didn’t seem that long ago that you purchased your new car, but suddenly you realize that your car is now considered an older new car, so it may be time to reconsider the auto insurance that covers it. When you drove your car off the lot, it made sense to purchase full auto coverage, but now may realize you could be paying for some coverage options you no longer need. Find out how to save money as your car ages and make sure you contact your local N.C. independent insurance agent to inquire what car insurance options you could possibly cancel.
Necessary Coverage Vs. Optional Coverage
N.C. mandates that if you own and operate a vehicle, then you must insure it with liability insurance, which is coverage to protect you against injuries and damages to others (Bodily Injury and Property Damage) that result from your negligence while operating your vehicle. The amount of your liability insurance limits should always be discussed with your local N.C. independent insurance agent to determine how much is enough. The minimum amount required by N.C. may be too low and should be carefully evaluated before you choose that limit of liability insurance coverage.
Collision coverage is coverage that provides protection for covered losses that result in damage to your vehicle, while Comprehensive coverage is coverage that protects against losses to your car such as vandalism, broken windshields, theft, or hitting an animal, such as a deer. Both are subject to applicable deductibles that may run anywhere from zero to $1000. When deciding which deductible to elect, you need to consider the highest amount you could pay out of pocket, should you experience a collision or comprehensive claim. The higher the deductible, the lower the car insurance premium.
When your car was considered new or “newer”, you may have been required to carry Collision and Comprehensive coverage, especially if there was a lien on the car; however, after your car loan is paid off, it may be a reasonable time to cancel that coverage, but discussion with your local N.C. independent insurance agent can help with that decision based on your car’s age and replacement value.
10 Years or 10 Percent
If your vehicle is 10 years old or older, having Comprehensive and Collision coverage may cost you too much in car insurance premiums versus what your claim payout would be if there were a covered loss. Determining how much your car is worth, in case of a total loss, is something to consider before you decide to keep this coverage on your auto insurance policy. Your car’s value can be established by many factors such as resale value, condition, Kelley Blue Book value, and area in which you live.
Another rule of thumb to consider when determining whether to keep Comprehensive and Collision coverage on your auto policy is determine whether the cost of the insurance is higher than 10% of your car’s value. If so, then the claim payout following a covered loss would be less than the amount you pay for the coverage.
Call Us to See if You Can Save Money on Car Insurance
Paramount Insurance Agency is here to answer any questions regarding whether you should keep Comprehensive and Collision coverage on your auto insurance policy and we can provide the needed assistance to help optimize/customize your N.C. auto insurance for a possible reduction in cost. Call us TODAY at 866-869-3335 for all of your N.C. auto insurance needs.
