Reader Question: When to Chuck Comprehensive?

Here’s the latest reader question, along with my reply!

Danny asks: When does one know the time is right to drop comprehensive insurance coverage on a vehicle? I enjoy reading your work!

My reply: A good rule of thumb is when the current retail market value dips below $10,000 – because at that point, anything more than a minor fender-bender will likely involve repair costs close to the 50 percent of retail value threshold at which most insurance companies will “total” a car rather than pay to repair it. Instead, they will cut you a check for the lowball retail value, which is rarely enough to buy you an equivalent replacement.

Some will disagree with me and argue that comprehensive can be a good deal, even when the car’s value slips below $10k. Maybe. But the only way to know is to (a) find out what you could save by going with the bare minimum liability-only coverage and (b) weigh your odds of ever being in an accident against that.

My position on this is that most “accidents” aren’t really. They are the result of driver error and thus largely controllable. I’ve not had an “accident” in decades and so the money I have saved by not buying comprehensive amounts to thousands of dollars. Rather than paying for coverage I never needed, I have the money instead.

Of course, your mileage may vary!

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Got a question about cars – or anything else? Click on the “ask Eric” link and send ’em in!

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