What is the best type of coverage for your automobile? It’s not such an easy decision if your vehicle is more than seven years old. Connecticut car insurance companies will reduce the rate (sometimes substantially) if you remove the collision and comprehensive benefits from your policy.The savings could easily be hundreds of dollars every six months, depending on the age and type of vehicles you cover.
We take the time to review your options and help you decide which coverage and carrier is best for your specific situation. Each vehicle is different and we help you understand the best ways to save money and maximize your benefits. Since vehicle turnover (especially with leases) is more common compared to 20 years ago, it’s important to accurately determine the most cost-effective coverage and deductibles for your car or truck.
Connecticut has financial responsibility requirements regarding the minimum amount of limits required to drive your vehicle (specifically discussed on this website). This type of coverage is the insurance that pays for damage you cause to other vehicles and property. It also pays for injuries to other persons that you may have harmed. Currently, the state minimum limits are $20,000 per person, $40,000 per accident, and $10,000 of property damage.
Uninsured and underinsured motorists coverage are also required at the same $20,000/$40,000 levels. Although in many other states it is not legally required, it is highly recommended because of the large number of drivers that either have no compliant coverage or rely on the lowest limits.
Liability coverage will not pay for any damage to your own car. So whether you have a “fender bender” that results in only a few hundred dollars of damage, or a major accident that totals your car, ultimately, you will not receive any type of settlement from the insurance company. If there is a bank loan on the vehicle, you will not be able to keep “liability only” coverage on your car, and must keep continuous compliant benefits as long as you own or operate the vehicle.
If your car or truck is no longer financed, you have much greater flexibility in determining what type of benefits you want on your policy. And typically, if it is leased, you will have to carry higher coverage to conform with the bank’s requirements. For example, liability limits of $100,000 per person and $300,000 per accident may be required. Optional “Gap” riders protect you in the event of a total loss that results in your existing loan exceeding the market value of the vehicle. However, on a five-year loan, often you will not need GAP benefits after the third year.
Full coverage consists of two basic components- collision and comprehensive. Collision pays for damages to your own vehicle as a result of you hitting another car, or another car hitting you. Also included would be damage to your car if you hit another object or roll over. Also, if you sustain damage by not colliding with anything, it falls into this category. Many unexplained dents and fender/bumper damage are typically considered “collision” damage (as opposed to “comprehensive,”) and thus, a larger deductible often applies.
Comprehensive typically includes damage to your vehicle that was not caused by a collision with another vehicle. Some of the most common comprehensive coverages include vandalism, loss or damage resulting from theft, fire, falling objects, storms and other (but not all) natural disasters. Towing fees and rental charges are sometimes covered by comprehensive claims. You can also purchase comprehensive coverage without collision coverage. Some carriers may charge extra to add towing and/or rental reimbursement.
Another fairly common claim is hail, which can easily cause thousands of dollars of damage. However, once a hail claim is paid on a vehicle, if the damage is never repaired, submitting an additional claim may not necessarily result in money awarded. Naturally, the same would apply to flood damage, or any other damage where money was awarded by the insurer, but was not used to repair the vehicle.
Collisions with deer are quite common, and generally do not cause your rate to increase. Also, since they are considered “comprehensive” claims, the deductible is usually much lower. Your policy also may contain a “buy-back-deductible” feature that provides credits each year you don’t submit a claim. Although the amount varies from one carrier to another, typically, it is about $50 per year, with a maximum of $250-$500 that can be accumulated. These credits can be used for deer claims and any other loss that results in out-of-pocket expenses.
If you are financing your car in Connecticut or have obtained a bank loan, you are required to keep collision and comprehensive until the loan is paid off. If you do not agree to add these coverages to your policy, you will not be able to qualify for the loan. If your existing insurance were to lapse while the car is being financed, the lending institution will place their own policy on the car…often at an extremely high rate. Additional information on all of the CT insurers can be found here. Additional financial records can also be provided.
When Should You Take Full Coverage Off Your Car?
Each customer’s situation is different and we closely examine your specific rates and vehicle information to determine what is best for you. Typically, when the combination of your collision and comprehensive premiums exceeds 15% of your total rate, it may be the appropriate time to consider dropping the collision and possibly the comprehensive as well.The Kelley Blue Book is a trusted resource that can help you quickly determine the market value (and replacement value) of your vehicle. However, one-owner vehicles in excellent condition may be worth more than the Kelley Blue Book indicates.
You also must be willing to accept that if you have an at-fault accident, and your car is totaled, you won’t have any coverage on your vehicle. Of course, damages to the other party will be covered. This could result in a financial burden that may be temporarily difficult to overcome, especially if you have poor credit, and can’t qualify for a loan with a low down-payment. Thus, if you have liquid assets of less than $500, retaining collision coverage is advisable.
Also, if you will be selling your vehicle within the next six months, retaining collision coverage for this short period of time is worth the higher premium you will be paying. Although it is unlikely you will be submitting an accident claim, by keeping coverage a little longer than anticipated, you could save thousands of dollars. Also, if potential buyers test-drive your car, their coverage may not transfer to your vehicle, leaving you with a financial mess if you have “just liability” at the time of the incident.
We review which limits and benefits are best for you. Once you have requested the free quote, some basic information is provided that helps determine which companies save you the most money. You can create multiple scenarios with different levels of coverage. You can also obtain a free customized review that will recommend the best deductibles and liability limits based on your budget and the types of vehicles you drive.