If you have a loan or a lease on your vehicle than yes, you need comp and collision coverage.
If you do not have a loan or lease on your vehicle than no, you do not need comp or collision coverage.
Simple as that.
When should you start to consider to remove collision coverage? When it is 10 years old. That is generally the time that people start to consider removing Collision. Now if your grandmom has a 2001 Camry with 50K miles on it than NO! DO NOT DELETE Collision coverage. Every situation is different.
I would recommend using the Kelly Blue Book to determine the value of your vehicle. From there, review your policy and see how much your collision coverage cost. A good rule of thumb is that the cost of collision should not be more than 10% of the value of your car.
COMPREHENSIVE Coverage (AKA Other Than Collision)
Comp is a little bit different. The 3 most common situations where a person needs comprehensive coverage….
1. You hit a deer. Fathers, especially fathers who are Insurance Agents, tell their kids to hit the deer (comp claim), not the tree (Collision Claim). A comp deductible is almost always less than the collision deductible. It will NEVER be more. So, if you are in a situation where you can either hit a deer or a tree…hit the deer. Having said that I am an animal lover and would never blame anyone for hitting the tree. Of course I’m a tree hugger too….
2. A rock hits your windshield. This WILL happen to you. Just hope when it does that it causes a crack less than the size of a quarter. Generally speaking a crack or chip that small can be repaired. And best of all there is no charge!! That’s assuming you have comp coverage of course. If it can not be repaired than a replacement will be done. Most windshield replacement companies will come to you at work, home, the pub. Wherever you are, they will go. If they don’t than find a different company.
3. Trees! That’s right, trees. If a tree falls onto your vehicle there is no coverage from your Homeowners Policy. Trees destroy homes, imagine what they can do to your car! Now imagine it is your neighbors tree. He’s not liable. It’s all on you.
You should have a comp deductible of $100 or less. It doesn’t make sense to have a higher deductible. Comprehensive coverage provides tremendous bang for your buck.
Keep comp and collision on as long as you can. But be smart, if the value of your car has diminished and the coverage is expensive, consider removing collision.
Any questions…call me.
RBA/The Laskey Group