When To Drop Collision And Comprehensive Insurance On A Car (2024)

If you own a car and drive on public roads, you generally don’t have much of a choice about buying certain car insurance coverage types. Depending on your state, you’ll likely need to buy some combination of liability car insurance, uninsured motorist coverage and possibly personal injury protection.

You might also want to buy collision and comprehensive insurance—which are generally required if you have a car loan or lease—to pay for repairs if your vehicle is damaged due to problems such as a car accident, fire or flood. But as your car gets older and less valuable, you might wonder whether it’s time to drop collision and comprehensive insurance.

What Do Collision and Comprehensive Insurance Cover?

Car insurance companies often sell collision and comprehensive insurance together, but they’re actually two separate coverage types that pay for different types of problems:

• Collision insurance pays to repair or replace your car if you accidentally collide with something, such as a car, guardrail, pole or tree.
• Comprehensive insurance pays to repair or replace your car if it’s stolen or damaged from problems such as a flood, fire, striking an animal, falling objects such as tree branches and vandalism.

Is Collision and Comprehensive Insurance Required?

No state requires collision and comprehensive insurance, but these are valuable insurance types that shouldn’t be overlooked. And if you have a car loan or lease, they’re likely required. That’s more to protect the lender or leasing company.

“They’re afraid that you won’t fix the car,” says Eric Poe, CEO of Cure Insurance. For example, if an accident bends the car frame, Poe says that the insurer will likely declare the vehicle a total loss. And in turn, the lender will demand you pay the loan balance. The insurance payout goes to the lienholder rather than allowing you to walk away from the unpaid loan.

Dealers that lease cars and trucks usually require full coverage car insurance, including collision and comprehensive coverage.

“You can’t drop this coverage if a car is leased or a loan isn’t paid off,” says Amy Bach, executive director of United Policyholders, a citizen advocacy group that specializes in insurance.

If you own a new or newish car outright and have the financial resources to buy a new car if you have to, you may not want to bother with collision and comprehensive coverage. This can ultimately lower your total car insurance payments by several hundred dollars each year.

Average Cost Per Year of Collision and Comprehensive Coverage

Your Vehicle’s Value May Not Be What You Think It Is

Computing the math for whether to drop collision and comprehensive insurance means assessing the value of your vehicle, and not the way you see it, but rather the way the insurer sees it. If an accident totals the car or truck, the insurer will reimburse the actual cash value of the car, such as the wholesale price at auction, not the sticker price seen on the dealer’s lot.

These prices are almost always much less than the resale values found on Edmunds and NADA Guides, according to the Cure’s Poe.

Weighing the Deductible

Car owners also need to weigh, in advance, the potential insurance payout of any collision or comprehensive claim. Both of these coverage types have deductibles, which reduce the amount of any insurance claims check. Deductible amounts can be in the thousands of dollars if that’s what you picked when you bought the policy. A $2,000 deductible on a total loss car valued at $5,000 is only $3,000.

You can choose a much lower deductible, such as $250, or even possibly $0, but you’ll pay more in premiums.

“The biggest misnomer is ‘just have the lowest deductible,’” says Poe, “because the lower the deductible, the more you’re increasing the risk to the insurer that you’ll file a claim.”

Poe compares this to health insurance. The lower the deductible—the amount the policyholder pays for a doctor’s visit—the more times you’ll see the doctor. And it’s true for auto insurance as well. By having a low deductible, the car owner is more likely to file claims with the insurer for a couple of parking lot dents that they could fix at their own expense or simply ignore.

“Having a high deductible may ultimately save you money,” Poe says. “If you do submit a claim and your insurer’s cost exceeds $1,000, you may be charged more for the next three years.”

Making the Decision to Drop

The standard rule of thumb used to be that car owners should drop collision and comprehensive insurance when the car was five or six years old or when the mileage reached the 100,000 mark. (Plenty of websites weigh in on this.)

But now it depends on the value of the car and its replacement parts. An expensive vehicle, like a Mercedes, may be worth the cost of collision and comprehensive coverage for several more years than a Nissan Sentra. And replacement parts might be so expensive as to easily exceed the deductible.

“These days you’re fixing a computer, not just a car,” says Poe, who had to replace the headlamp on his Cadillac Escalade at a cost of $2,349.

Older vehicles that are still drivable, but have lost a huge chunk of their value through depreciation, have their own calculus. When insuring these vehicles, it makes sense to drop one or both of these coverages. That’s because your maximum payout—which is the value of the car minus your deductible amount—will likely be extremely low and not worth the insurance cost over time.

Owners of classic and vintage cars usually have special considerations. Owners of these vehicles typically have classic car insurance. These policies are based on the car’s “agreed value” instead of depreciation. And an agreed value could be based either on the car’s condition or on the price of the special-order parts necessary to repair it, says Loretta Worters, vice president at the Insurance Information Institute.

What About Dropping Just One?

Given the cost of collision and comprehensive coverage, and the potential payout, does it make sense at some point to keep one coverage and drop the other, and can you do this?

The answers: Yes and yes. While insurers generally sell them together, and drivers of older cars often drop them at the same time, Poe and Worters both say that comprehensive insurance is a better value for the money than collision coverage.

“Bet on Yourself to be a Safe Driver”

When thinking about your auto insurance coverage, “bet on yourself to be a safe driver,” says Poe, adding that, “95% of all drivers haven’t had an at-fault accident in three years.” That reduces the statistical need for collision insurance, which pays for repairs if you crash into a building, tree or someone else’s car.

Comprehensive insurance covers a whole host of common problems that don’t always involve your own driving, such as fire and falling tree branches that crush the roof.

There is always the threat of a natural disaster.

Hail storms are a familiar threat, especially to car windshields that are also vulnerable to road litter scooped up and thrown by car and truck tires. Some states require insurers to repair windshields without cost to the car owner—as a safety measure—if the vehicle has comprehensive coverage. Other common threats include theft, not only of a car, but also of expensive parts like the airbags found on all newer cars.

Ultimately, like most forms of insurance, it can come down to peace of mind.

“Before dropping comprehensive and collision,” says Bach, “ask yourself: ‘What’s my plan to replace the car if it’s lost?’”

Dropping Collision and Comprehensive Insurance Frequently Asked Questions