The cost of owning a car goes well beyond the sticker price at the dealership.
There arefuel costs,routine maintenanceand, of course,car insurance.
Liability coverage is the most basic form of car insurance and is absolutely necessary.
Some states require additional types of coverage beyond liability.
This depends on the value of your car, your current finances, your health insurance policy and more.
So what is collision insurance?
Do you need it?
And what types of car insurance can you skip?
When Insurance Falls Short…
Unfortunately, insurance doesnt covereverything.These resourcescan help you manage those unexpected expenses.
What Is Collision Insurance?
Do I Need Collision Insurance and Comprehensive Coverage?
If your car is worth a lot of money, you should absolutely carry both collision and comprehensive coverage.
In fact, if your car is financed, your lender may require you to.
Both can save you thousands of dollars in repair costs if you happen to get in an accident.
Chris Tepedino, also of CarInsuranceComparison.com, warns that bundling uninsured motorist and collision is often a mistake.
Uninsured motorist protects your car if its hit by someone who doesnt have insurance, he said.
Collision, well, protects your car.
Dont be suckered into thinking you have to buy both.
Overlapping generally doesnt help.
Other Insurance You May Not Need
Collision car insurance isnt a smart choice for everyone.
Likewise, there are other types of car insurance you may not need.
Learn more about these insurance options before committing.
With theaverage new vehicle costing $47,401, that could mean you lose out on nearly $9,500.
Thats where gap insurance (guaranteed asset protection) comes in.
Similarly, you dont need gap coverage if youve paid off your vehicle.
Or, if you purchase an old vehicle that wont depreciate as quickly, Tepedino said.
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However, the cost of paying for this each month would likely exceed the cost of a rental vehicle.
That is, unless you crash frequently or need a rental for multiple weeks.
Even then, you may be better off relying on friends and family for temporary transportation, if possible.
However, many new cars come with roadside assistance, often throughout the length of the warranty.
You may even be able to find it cheaper from AAA or a similar service.
If you live paycheck to paycheck, this additional insurance expense is one to avoid.
However, if you have decent health insurance, it’s possible for you to likely skip this coverage.
Want to Save Money on Car Insurance?
Proceed With Caution
The cost of your insurance is proportional to the deductible and coverage limits you choose.
The lower your deductible and higher your coverage limits, the more youll pay in insurance premiums.
But Tepedino warns that this is a risky way to save money.
The average cost of an accident with property damage alone is $7,500, he said.
That number obviously jumps with a death or severe injury, so go at your own peril.
I am not a fan of simply meeting state minimums, Weiss said.
It puts too many families at risk of a financial loss they cannot cover.
There are some personal injury coverages that may be required, but limits are typically low.
You often get what you pay for.
