full coverage

Posted: Fri Nov 07, 2008 01:20 am Post Subject:

First, I _hate_ the term "full coverage". It's not a coverage and it means something different to different people.

Keeping collision and comprehensive coverage is determined by your loan agreement with the lienholder. But I've never seen an agreement that does not require keeping it until the vehicle is paid off. The only way to lower those premiums are to increase the deductible. Most lien holders require no higher then a $500 deductible.

If you drop the insurance, then the value of the vehicle means nothing. If it's stolen and does not have comprehensive coverage then you won't have any coverage and will still have to pay the $1500. If you drop the collision coverage and it is damaged, you won't get paid anything and will still have to pay the $1500. So the lien holder is going to require that you maintain the collision and comprehensive coverages.

Posted: Fri Nov 07, 2008 07:04 am Post Subject:

Of course, you can't drop the liability coverage whether or not you have a lien on the car. You need to maintain sufficient liability coverage as long as you will drive on the road. You can only cut on the comprehensive and collision coverage. And as long as you have an outstanding loan on the car the lien holder might want to maintain the coverage as well.

Consider the situation of total loss in case of an accident or car theft, without the collision and comprehensive coverage you'll not receive any compensation. Now if you are sure that you'll be able to absorb the loss and can pay for the damages out-of-pocket, you can drop the collision and comprehensive coverage. The decision is yours.

Posted: Fri Nov 07, 2008 07:35 am Post Subject:

If your car is an old and battered one which has lost enough value in terms of actual cash value, you may wish to lower the coverage level of comprehensive and collision coverage. However, you may need to receive the lien holder's consent about it before lowering the level.

Posted: Fri Nov 07, 2008 10:44 am Post Subject:

I am glad someone has asked this question. I have thought about lowering the insurance I carry on my 2000 Grand am since it isn't on the road much. A very wise person at this forum told me to look at it as if I had to totally replace the vehicle had it been unrepairable after a accident. Considering that and how much I personally value the vehicle made me relize that dropping down to a lower insurance was not a move I wanted to make at the moment. So my advice for you would be to consider these things also.

Posted: Fri Nov 07, 2008 11:07 am Post Subject:

I only owe $1500 more on my car loan, and the private party resale value is $3600. Do I have to keep carrying full coverage on the car, or can I drop down now to something less expensive?