Insurance is one of those things that you just need to purchase. In many cases, insurance is designed to help you protect your assets. In the case of car insurance, you are expected to purchase it. It’s the law in each of the 50 states.
As you move forward, though, your insurance needs might change. You don’t have to keep the same car insurance coverage year after year. Here are some signs that it might be time to change your car insurance coverage:
Your Car is Old Enough that Liability is all You Need
One of the biggest reasons that people change their car insurance coverage is due to the car’s declining value. In some cases, it might no longer make sense to keep comprehensive coverage on your car, especially as the replacement value drops dramatically. You still need to maintain collision coverage, which helps you manage your liability if you cause an accident, but you might be able to drop some of your other coverage.
If you decide to drop the comprehensive coverage, you can save money on your premiums, but you need to make sure you’re ready for other costs. You might have to be able to replace the car if you total it. Do you have enough money to buy a new or used car or to put a down payment on a car? If you don’t have the money, and you need a vehicle, it can make sense to keep the comprehensive a little longer so you get some sort of help getting a different car if you need one. Building a savings account can help you self-insure to some degree.
You Make Changes that Increase the Value of Your Car or Its Contents
On the flip side is the fact that you might make modifications to your car that make it more valuable. If you add a new stereo and speaker system, you need to change your coverage because you will want the cost of the stereo covered in the event that it is damaged or stolen.
Don’t forget to evaluate your coverage if you have a vintage car or some other vehicle that is worth more money. If you fix up a classic car, you will need to make sure buy the right coverage, and get the right amount since some of these vehicles can be quite valuable.
Your Family Circumstance Changes
Did you add another driver to your family? When your child is old enough to drive, you might need to change your coverage. You might also need to change your coverage if you get divorced or married or make another major change to your life. You want to make sure that the proper drivers are covered on your policy, and that the coverage reflects the risk profiles of the various drivers.
Even if you end up paying more for coverage, it might be worth it in the long run. You’ll have more peace of mind, and you can ensure that you don’t have to break the bank to replace a car or its contents.
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