Should I carry Comprehensive & Collision coverage on my Auto Insurance?


Hello! I’m Dan Lyles with Lyles Insurance. and
in this video we’re going to cover a very often asked question should I carry
comprehensive and collision coverage on my auto insurance as you can see here
there are five major parts to an auto insurance policy and comprehensive
coverage and collision coverage kind of work hand-in-hand as the fourth and
fifth parts comprehensive and collision coverage together provide the physical
damage coverage on your vehicle now while these are both optional coverages
if you finance your vehicle your bank is going to require you to carry both
comprehensive and collision coverage until your loan is paid off so now let’s
go over what comprehensive and collision actually covers and the best way to
understand it to learn it backwards collision coverage pays for damage to
your vehicle from an accident whether it be just a two-car accident a one car
where maybe you ran off the road and hit something damaged your vehicle or multi
vehicle accident anything like that is under collision coverage comprehensive
coverage which is also known as other than collision coverage in some states
it pays for damage to your vehicle for just about anything else
examples include theft fire vandalism weather damage hitting a deer things
like that they both pay for damages to your vehicle up to its market value
– whatever deductible you now let’s dive into the question should
I carry comprehensive and collision coverage and this applies whether you
already have comprehensive and collision coverage on one or more of your vehicles
or if you’re looking for a new policy and a vehicle to ensure the main thing
to remember is that the coverage amount offered on both comprehensive and
collision coverage will slowly drop over time as your vehicle depreciates of
value and this leads to much debate about when is the right time to drop or
pass on it some suggestions you might hear people say is to drop it as soon as
you’ve paid off a car load some say when your vehicle reaches a certain age or
whether your vehicles market value drops below a certain amount keep in mind
there isn’t a right or wrong answer my suggestion is to do the math and decide
for yourself and I’m going to help you with that before we get into doing the
math it’s important that you understand how to duck tables work deductibles are
your out-of-pocket expense whenever you have a comprehensive or collision claim
let’s suppose for example that you have damage that costs two thousand dollars
to repair if you have a 250 dollar deductible a claim would pay out $1,750
2000 – the 250 same with the 500 adduct able a claim would pay out 1500 or if
you had a thousand dollar deductible the claim would pay out a thousand so
deductibles have an inverse relationship with price
the higher the deductible the lower the premium but of course it also means more
out-of-pocket money if you have a claim and vice versa the lower the deductible
the higher the premium the best way to determine whether to
keep or drop comprehensive and collision coverage is to simply do the math and
decide for yourself in order to do that you just need to know three variables
the market value of your vehicle what deductible you are carrying and also
find out how much extra premium that you’re paying just on the comprehensive
and collision parts and add those together so to do the math you simply
take the cost of premium for comprehensive coverage add that to the
cost of premium for collision coverage and compare the total with the market
value of your vehicle minus the deductible this will allow you to answer
two key questions number one how long would it take of paying the extra
premium to equal the market value minus the deductible on your vehicle and
number two if you were to drop comprehensive and collision coverage
could you afford to replace your vehicle if you were to total it and again there
are no set right or wrong answers to this question this is something you need
to decide for yourself I hope this video has helped you understand the thought
process of comparing whether or not it’s worth it to keep or drop comprehensive
and collision coverage if you have any questions I’ll be happy to help you I’ve
posted links to my auto insurance webpage my email address and my phone
number and if you would like for me to personally run you a quote and you live
in Ohio Indiana Pennsylvania Michigan Virginia or West Virginia click on and
fill out the quote link below and I’ll be happy to run your quote and get back
to you with price thanks for watching and have a great day

Paul Whisler

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