If you have recently paid off your car loan, you will have one less payment to make every month. This is also a good time for you to review your Minnesota auto insurance coverage. Making some changes to your policy at this point can help you save money on the cost of your coverage.
You can lower your car insurance costs by dropping the collision coverage once your vehicle has been paid for in full. If your car has a low cash value, this can be a savvy move, since your policy will only pay out based on this calculation.
At a certain point, it doesn’t make sense to keep paying a level premium for a policy that pays out a benefit that continues to drop over time. When your car has an outstanding loan on it, the financing company wants to protect its interest by having collision coverage in place. Once the loan has been paid off, any benefits payable under the policy would go to you instead of the lender.
You can also save on the cost of your Minnesota auto insurance by lowering your comprehensive coverage to fire and theft only. Normally the comprehensive part of your policy would cover damages caused by events other than a collision.
Before you make a decision about dropping your collision and comprehensive coverage, get quotes from a few car insurance providers so that you can find out how doing so will affect your rates.