when to downgrade your car insurance cover

When should I drop full coverage on my car?

If you’re on a budget and trying to see where you can cut costs, downgrading your car insurance might have crossed your mind. Downgrading may give you less protection from incidences on the road, however, you might be paying for something you don’t actually need. Off the bat, first make sure you understand the difference between comprehensive cover and third-party, fire and theft cover.


From there, you can decide when the best time to downgrade is. When deciding whether to downgrade your car insurance, you should first consider your own needs, your driving record, the amount of protection you would like on the road as well as your budget. Let’s start by looking at the different types of car insurance cover available and the questions you need to ask yourself before deciding to drop or downgrade your car insurance.

Types of car insurance

Comprehensive insurance

This is the most extensive option available and covers your vehicle in the event of accidental damage, hijacking, and theft. It also covers you for damage caused by weather conditions such as hail storms or floods. If you are responsible for an accident and are required to pay for the repairs of the other vehicle, comprehensive insurance will cover these costs.

Third-party, fire and theft cover

Better known as limited liability cover, this kind of cover is similar to comprehensive but it only covers third-party, theft, and fire insurance, and does not cover the costs for accidental damage. This means that if your car is stolen, you’ll be covered, but if you cause an accident, the repairs to your vehicle won’t be covered.

Third-party insurance

This type of car insurance will only cover the repairs to another person’s car (ie. the third party) in the event of an accident. Your vehicle will not be covered at all in the unfortunate event of accidental damage, theft, and hijacking. This type of insurance cover is the cheapest as it is so limited in its cover.

Should you downgrade your car insurance?

The Coronavirus pandemic has changed the car insurance landscape. These days people are aren’t driving as much as they used to because more and more people are working from home and going out less often. As we spend less time on the road, we tend to think that we then have a lower risk.

If you’re considering downgrading your car insurance, now is a good time. It is important to remember that this decision is entirely personal. Once you start driving more and getting out and about, you might want to reconsider downgrading.

What to consider when downgrading

If you’re thinking about downgrading your car insurance from comprehensive cover to limited cover, there are a few things to keep in mind: you should consider first.

  • The cost of the cover: Compare the cost of comprehensive cover to the cost of limited cover. If it’s not a significant price difference, it would pay you to rather stick with the comprehensive cover, especially if you can afford the monthly commitments. The benefits received on the comprehensive cover might land up out-weighing a small decrease in premium.


  • The age of your car: Car insurance on newer cars is generally more expensive than on older cars as the costs to repair new vehicles are much higher. If your vehicle is new comprehensive cover will ensure you spend less money repairing your vehicle after an accident. If you drive an older vehicle, downgrading your coverage might make sense especially if you’re thinking about buying a new one in the near future.


  • The value of your car: This factor directly relates to the age of your vehicle. High-value vehicles are more expensive to repair and therefore comprehensive cover is a no-brainer. By downgrading to limited cover, the cost of repair would come directly out of your back pocket, making it an expensive exercise. In this case, it would be better to keep comprehensive cover.


  • Whether your vehicle is financed: If your vehicle is financed through a bank, you are required to keep comprehensive cover. Most asset lending companies require drivers to have comprehensive car insurance so you can still afford your vehicle loan repayments if your car is damaged. Before downgrading, make sure you know how much insurance you need to have.


  • Your replacement cost: If your car is written off in an accident, the insurance company will use the replacement cost of your car to determine your payout. The replacement cost is never the same as what you paid for the vehicle. If you downgrade to limited cover, you’ll need to pay for a new car out of your own pocket.


In most cases, your financial situation will determine the type of car insurance cover you opt for. Although it might seem tempting to downgrade your cover, make sure you consider all factors before making a final decision. If you are driving an older vehicle that is fully paid up, you are more than likely over-insured if you still have comprehensive cover.

There is no right or wrong answer about if and when you should downgrade your car insurance cover. Be sure to research your needs and talk with the insurance company about the right option for you.



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