When Should I Downgrade My Auto Insurance?

In Oregon, we don’t have any choice in whether we carry auto insurance. But we do have control over how much insurance we carry, and sometimes downgrading coverage is a smart financial move. There are many variables at play, but the bottom line is that you should still carry comprehensive coverage if your vehicle is worth a fair amount of money.

Do the Math

Once your vehicle nears double digits, start running some numbers. Calculate your yearly insurance costs, which would be your monthly premium multiplied by 12. If this number exceeds 10 percent of your car’s value, you might be okay removing comprehensive coverage. Remember, though, that your car’s exact value might differ, so there’s still some risk involved here.

Weigh the Risk

This rule is also based on the average cost of damages incurred in a car accident. Some drivers will be in worse accidents, while others could see less damage. It’s important to weigh this risk before downgrading coverage. Unfortunately for the ones who end up in very bad accidents after reducing coverage, they could end up eating the cost of a totaled car out of pocket.

Consider Your Savings

If you’re still on the fence about whether to downgrade auto insurance, consider your savings account. Would you be able to cover the costs of paying off or replacing your vehicle were it to be totaled? If you have the cash, you may be able to get away with downgrading. But if you’d end up in financial trouble over it, it probably isn’t worth the risk. Consider padding your savings while keeping comprehensive coverage, then reevaluate down the road.

Search for Lower Rates

If you’re just looking to decrease your monthly costs, you may be able to find lower rates from other providers without downgrading coverage. Focus1 Insurance Group can shop around with different major auto insurance companies to find the best rates for your coverage needs. Our team can also help you tailor your coverage amounts based on your driving habits and financial situation. Learn more about our insurance services by calling Focus1 Insurance Group at 541-772-3120 or request your free quote now.