When it comes to car insurance, there are two major options -- comprehensive and liability. Comprehensive insurance covers both you and the other driver in the event of an at-fault accident, while liability only covers damages for the other party if you are at fault.

Do You Owe Money on the Vehicle?

If you are still paying off a loan on the vehicle, the answer to this question is simple -- you must keep comprehensive coverage for the full value of the vehicle. This is usually required by the bank that holds your auto loan, as it ensures they will recoup their investment in the event that the car is totaled. It also means you won't get stuck making payments on a vehicle that can no longer be driven.

Are You Dependent on the Vehicle?

Do you need the vehicle so you can work or run necessary errands? Are there other options you can use in the event the car is damaged in an accident and you can't afford to fix it or replace it right away? If even minor repairs are out of your budget, it makes sense to keep the car under full coverage.

Can You Easily Replace the Vehicle?

A totaled car is one that can't be repaired for the value it is worth. In some cases you can still make the car drivable again, but not always. If replacing a car that has been totaled isn't affordable, then you need to keep full coverage. This way you will receive an insurance payout that will help you replace the car in the event that it suffers irreparable damages in a car accident.

Is the Vehicle At Risk In Your Location?

Comprehensive coverage covers more than just the damage to your car from an accident. It can also protect you in the event of theft, vandalism, or damage from things like falling trees. Depending on the coverage, you may also be covered for vehicle flood damage, hail, or one-car accidents like hitting an animal or telephone pole. If you live in an area with a higher risk for any of these types of damages, then full coverage can be a very wise decision.

How Many People Drive the Vehicle?

You can't control how other people drive the car. If you share the car with other members of your family or household, you may want to keep full coverage so that you are protected even when you aren't the one behind the wheel. This is especially true if there will be teenagers or other new drivers using the vehicle.

Contact a broker to discuss your auto insurance plan options today.