Now that you’ve paid off the car, you’re free of that obligation. However, that doesn’t automatically mean dropping the coverage is a good idea.
Don’t rush to drop collision and comprehensive coverage to save on your auto until you’ve calculated whether this is the right move for you. Collision pays for repairs or replacement if the car is damaged or totaled in a traffic accident, and Comprehensive pays for repairs or replacement if the car is stolen or damaged by something other than a traffic wreck, such as theft, vandalism, fire or collision with an animal.
First consider how much the car is worth now. It typically doesn’t make sense to buy collision and comprehensive for a car worth less than $1,000.
Also consider whether you’d be able to afford repairs or the purchase of a replacement vehicle without insurance. Even if the car is worth only $3,000, collision insurance would save the day if the car was totaled and you had no financial resources to replace the vehicle.
If you do decide to drop collision and comprehensive, set aside the money you save on auto insurance to pay for repairs or eventual replacement of the vehicle.
If you have any questions, please feel free to contact your local Cullen Insurance Agency.
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