Estimated read time: 2-3 minutes
- Utahns can save an average of $1,300 annually by switching from full to liability insurance.
- Creed Anderson of ASA Insurance advises considering car value and deductible before switching.
- Liability only covers others; full coverage protects against theft, accidents and nature.
SALT LAKE CITY — Congratulations — you just paid off your car! Now you're free of both car payments and your old lender's requirement of carrying full-coverage insurance.
The average Utahn pays over $2,128 every year for full coverage, says Bankrate. Meanwhile, the average annual liability policy runs $802. So, downshifting to just liability could save you over $1,300 each year.
The right move?
But is shedding comprehensive and collision coverage the right move?
The KSL Investigators took that question to Creed Anderson, who runs ASA Insurance.
"It depends on the value of your car," Anderson said. "Also, you got to remember you have a deductible."
Let's say your ride is worth $3,000 and your deductible is $1,000. The most you could expect from a full coverage claim is $2,000. But if you're already paying more than that for your premium, Anderson says paying for full coverage probably isn't worth it.
"Then if you do have a claim, now you've got a claim on your record for the next three to five years. You're going to have to pay extra on insurance for that, too," said Anderson.
But if you're at fault for a crash, liability only covers the other driver. And you won't be covered if your car gets stolen, you hit a deer, your car gets damaged by a flood, a falling tree or anything else Mother Nature throws at it.
So, if you cannot afford to pay out-of-pocket to fix or replace your car, keeping full coverage might be the better option.
"Really comes down to, are you going to be able to walk away from your vehicle if you total it financially?" said Anderson. "And maybe some people can. But most people can't do that."
Other cost-saving methods
Some things that can help lower your premium include getting all the discounts you can. Talk to your agent about discounts for low mileage, bundling and certain occupations like teachers, doctors and first responders.
And a higher deductible will lower your premium, as will a higher credit score. Something even easier is to shop around and compare multiple policies.
