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Finding Better Insurance Plans

After I switched jobs, I knew I would probably be faced with choosing a new insurance policy. I was nervous about the transition, but I knew it had to be better than the plan I had been using at my old job. I started going through the options with the human resources person, and it took me a long time to understand the different options. After a thorough evaluation, I opted for a health savings account, which let me keep a large percentage of what I would normally be paying in premiums every single month. Check out this blog for more information about health insurance plans.

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Dropping Comprehensive And Collision Coverage For Your Older Car...Does It Make Financial Sense?

Many drivers opt to get rid of comprehensive and collision insurance coverage on older cars. Older cars aren't as valuable, and the amount of money you receive from the insurance company after an accident or auto theft might not make up for the added monthly premiums you pay for the additional coverage. Is this a wise idea? Here are some factors for you to consider if you're thinking about removing comprehensive and collision coverage from your older car.

The Value of Your Car vs. Your Monthly Premium For Comprehensive and Collision

The primary factor you need to consider when thinking about changing comprehensive and collision coverage is the value of your vehicle. The purpose of these types of insurance is to make you whole in the event of an accident by paying for repairs to your vehicle or paying to replace it. If the cost of repairs exceeds the value of the vehicle, your insurance company will consider the vehicle a total loss and pay you what the vehicle is worth so that you can replace it. This means that your insurance payout is capped at the value of your vehicle.

Since your auto insurance payout is capped at the value of your vehicle, you need to weigh the cost of your insurance premiums for comprehensive and collision insurance versus the maximum payout you'll get from the insurance company. Cars depreciate, and many older cars are simply not worth very much — especially if they have mechanical issues. If you could easily afford to replace your car in the event that you got in an accident or had your car stolen, it's probably not worth paying the extra insurance premium for comprehensive and collision coverage.

The Number of Mechanical Problems Your Car Has and How Much You Want to Keep It

As cars get older, they invariably experience increasingly frequent mechanical problems. These problems are accompanied with the requisite expensive bills from mechanics in order to have the vehicle repaired. At some point, most drivers find that the cost of keeping their vehicle running outweighs the cost of purchasing a newer vehicle with less wear and less mechanical problems.

The increasing number of mechanical problems experienced by older cars is important to consider when you're thinking about changing your level of comprehensive and collision insurance coverage. If an expensive bill from a mechanic would cause you to abandon the car, it's a good idea to remove comprehensive and collision insurance from your policy. You're paying monthly premiums for a car that you don't care too much about keeping.

Your Financial Situation and Ability to Easily Replace Your Transportation

From the above, it may seem like there's no point in keeping comprehensive and collision insurance coverage on an older car. However, there's one very important reason why you might want to. If you rely on your car to get to work every day and don't have good credit or enough money in savings to purchase another car, you'll want to keep your comprehensive and collision coverage. If you're in an accident or your car is stolen, you'll be in serious trouble when you're left without a way to get to work. It's worth paying the extra premium for the security and peace of mind of knowing that the insurance company will cover you in these unfortunate situations.

Whenever you make changes to your level of coverage, it always pays to shop around for the lowest auto insurance rates. Dropping comprehensive and collision coverage from your car is definitely one of those times. Insurers vary in how they price different amounts of coverage, so determine your desired level of coverage and discover what rates you'll receive from a number of insurance companies.