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Do You Have Too Much Car Insurance?

by Amy Walters

Most people really want to make sure they have enough auto insurance. There are too many risks out there. But in some cases it also can be possible to have too much auto insurance. There’s no reason to overpay for your car insurance just because you didn’t understand exactly what coverage you have and how it works.

Every state requires liability coverage. This is the one that helps protect if you’re in an accident that’s your fault. Liability protection provides coverage to anyone other than the insured who is injured or suffers damage in a wreck.  It is typically expressed as three numbers: The first is the maximum payout for injury per person; the second is the maximum payout for injuries per wreck; and the third is the maximum payout for property damage per wreck. There are state minimums for this coverage, but just the minimum might not be enough: Remember, you’ll have to pay once your limit is met, so this is not one where you’ll want to scrimp.

Some states also require other types of coverage. However, many of the other protections you consider in a policy are optional. Following are some instances in which you might have too much auto coverage. However, talk your policy over with a licensed agent before deciding whether you should streamline your coverage.

Collision and Comprehensive Insurance

First, understand what these two coverages do. Collision coverage kicks in if you run into something (other than an animal) on the road, and it’s your fault. It provides for repairs to or replacement of your vehicle, after you meet the deductible. Comprehensive coverage is for anything other than a collision, including vandalism, theft and fire. Again, it pays for repairs to or replacement of your vehicle, and you must pay a deductible.

If you’re still paying off your car, your lender almost always will require you to have these coverages to protect your investment. But if you’ve paid off your loan and your car is 10 years old or older, its value might not be high enough to justify coverage once you factor in paying your deductible anyway.

Towing and Labor Coverage

There’s nothing wrong with having Towing and Labor Coverage as part of your policy, especially if you regularly drive long distances. It can really be helpful if you make frequent cross country trips, securing a tow if you have an accident and your car can’t be driven. It also will pay for repairs if you have a flat or another problem on the road.

However, towing and labor coverage also can be superfluous if you have roadside assistance from your car manufacturer or from AAA or a similar service.

Uninsured/Underinsured motorist protection

Be careful with this one, because it is required in some states. It covers you in case another driver is at fault in an accident but doesn’t have enough or any liability insurance to pay for the damage. If you have adequate health and liability insurance, you might not need this coverage.

Glass Breakage

This coverage sometimes is included with collision and comprehensive coverage. If it comes as a separate option, it usually is not worth the cost. Members of AAA and other services might already have coverage as well. The best case for having this is you regularly drive on unpaved roads or through construction sites or live in a sketchy neighborhood.

Rental Reimbursement

If your car is being repaired after a covered wreck, this helps cover the cost of renting one. It’s a great luxury but isn’t a necessity. If you can use another vehicle, catch a ride with someone else or take public transportation while your vehicle is in the shop, you can skip this option.

Again, don’t make any move to reduce your coverage without talking it over with a licensed agent. But if there’s no good reason to carry the above protection, you may consider doing without it.

This article was contributed by C. Wiley of




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