At Blue Hen Insurance LLC in Middletown, DE, we understand that our clients often have concerns about the necessity of comprehensive and collision coverage. With this blog, we aim to provide you with the clarity and peace of mind you need when choosing the best auto insurance policy for your vehicle.

Understanding When Comprehensive and Collision Coverage is Required

Comprehensive and collision are excellent coverages for your auto insurance policy but are often optional for most customers. However, suppose you are under contract with a lienholder and still making finance payments on your vehicle. In that case, you may be required to carry comprehensive and collision under that contract. The lienholder wants to ensure that you can get your vehicle repaired if there is a covered incident.

Lienholders feel consumers won’t pay for their cars if they are not operable. And if you don’t pay your finance payments, they want your vehicle in good shape to resale and get their money. Lienholders also require comprehensive and collision coverages because if you are in an accident and there is a total loss, they have a better chance of getting their money back. If listed on the policy as a lienholder, they are paid first when there is a total loss, and they give you what money is left after the claim pays off the vehicle.

Ultimately, the decision to carry comprehensive and collision coverage is yours. If your vehicle is paid off, you may choose to drop these coverages to save on premium payments. You may also change coverages if your car’s value isn’t much more than the comprehensive and collision deductible due to its condition, age, and mileage. However, if your vehicle is your only mode of transportation, you may feel differently about losing these great coverages. The choice is entirely up to you.

We are Here to Help!

Our licensed professionals at Blue Hen Insurance LLC in Middletown, DE, are here to answer any questions about comprehensive and collision insurance and if it’s necessary to carry this optional coverage in your unique situation. Call us today at (302) 696-2242.