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Comprehensive Collision Insurance is one of the auto insurance policies most people have heard of but few could describe fully.

Apart from describing what it is even more people are foggy on whether they should have it, how much to have, how long to carry it, and if or when they should drop it.

These are all important questions to know, not only from a financial standpoint but from a legal one because of state law requirements of having proper insurance coverage.

To simplify this explanation I’ll describe each insurance term separately. First I’ll explain collision insurance. Collision insurance covers your car if someone hits or you hit someone’s car. In addition it also covers you if an object such as a tree, rock other physical item hits your car causing damage.

Comprehensive coverage pays for damages to your car other than a collision. For example, water damage, fire, vandalism or theft, etc. Note, you’re covered for all damages minus whatever deductible you have. If you finance your car it’s mandatory that you carry enough comprehensive collision insurance to cover the cost of the car. Not doing so would be a violation of your financial or lease contract.

However, if you pay cash for your car or you own the pink slip on your car, you have the choice as of whether you should have this insurance on your car. One of the main reasons in deciding this is the age and value of your car.

If your car is over 5 years old and you’re a safe driver you may want to consider taking more of the risk on yourself by raising your deductible. Doing this could save you hundreds or may even thousands of dollars a year. You could take those savings and place them in an interest bearing savings account in case you need it for any repairs down the road. Meanwhile it’s earning interest for you instead of your insurance company.

If you own a clunker you’ll almost always save big money by dropping your collision coverage.

You must also take under consideration that no matter how much damage your clunker has in an accident, the insurance company will never pay you more than the cars value. That’s why you should drop the Comprehensive and Collision if you own a low market value car.

These are a few of the things you should know before shopping for or comparing insurance or if you need an insurance quote quick.Roy Primm has written dozens of articles showing others the latest tips to saving money on their auto insurance. Check his tips out before you get your next quote at Car Online Insurance