When to Drop Collision and Comprehensive Coverage

Updated: August 7, 2026

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When You Should Drop Full Coverage

Full coverage offers the highest form of financial protection for your vehicle, but it's not right for every driver. You should consider dropping full coverage on a car that's worth less than $7,500, is fully paid off, and costs more than 10% of what the car is worth to insure. 

Below are some general rules for when to drop collision and comprehensive coverage based on cost-benefit analysis; all four need to apply before dropping makes sense.  

When to drop full coverage:

  1. 10% rule: Your annual premium for collision and comprehensive exceeds 10% of what your car is worth. If your car is worth $6,000 and you pay $900 a year, that's 15% of the vehicle's value. Drop it.
  2. Car value rule: Your car is worth less than $7,500. The old benchmark was $5,000, but premiums now cost $200 to $250 a month and repair costs have climbed. A car worth $7,500 or less often doesn't justify the coverage cost.
  3. Savings rule: You have enough in emergency savings to cover a large repair bill on your own. Check average repair cost estimates for your make and model to be sure.
  4. Ownership rule: Your car is paid off. Lenders require comprehensive and collision if you're financing or leasing. You can't drop either until the loan is gone.

When to Drop Collision and Comprehensive Coverage

You don't have to drop both at once; collision and comprehensive serve different purposes. Driving habits affect collision risk. Location affects comprehensive risk. Drop one and keep the other if that's what your situation calls for.

  1. 1

    When You Should Drop Collision

    Drop collision when your driving risk is low and the premium doesn't justify the protection.

    • You meet all four rules of thumb above.
    • You have a clean record. Most drivers haven't had an at-fault accident in the past three years.
    • You drive infrequently or stick to local roads. 5,000 miles a year on local streets is lower risk than a 40-mile highway commute every day.
    • Your car is paid off and you have emergency savings to cover a large repair bill.
    • Your annual collision premium exceeds 10% of your car's value.

    Don't drop collision if you're a new or high-mileage driver, or if your car is financed or leased. Lenders require it.

  2. 2

    When You Should Drop Comprehensive

    Drop comprehensive when regional risks are low and you can cover the loss yourself.

    • You meet all four rules of thumb above.
    • You park in a secure garage and live in a low-crime area.
    • Your region has no significant history of hail, flooding or severe storms.
    • You can afford to replace the car if it's stolen or totaled.
    • Your car is paid off. Lenders require comprehensive if you're financing or leasing.

    Don't drop comprehensive if you don't have emergency savings. It costs $200 to $400 a year but covers catastrophic losses like theft or major weather damage.

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INCREASING YOUR DEDUCTIBLE VS. REMOVING FULL COVERAGE

Before dropping collision or comprehensive entirely, consider raising your deductible instead. Raising your deductible from $500 to $1,000 saves $100 to $200 per year on collision. That's less savings than dropping it completely, but you still have coverage you need. Just make sure you have enough saved to pay that higher deductible in the event of an accident.

What You Lose When You Drop Comprehensive & Collision

Depending on whether you drop collision, comprehensive or both, you will lose coverage for repairs to your car caused by specific incidents. Even if you drop full coverage, your liability insurance will still pay for damages to the other driver if you're at fault in an accident.

  1. 1
    If you drop collision coverage:

    You're no longer covered for accidents you cause or single-vehicle crashes (for example, if you hit another car, a tree or a guardrail). You pay 100% of your vehicle's repair costs out of pocket.

  2. 2
    If you drop comprehensive coverage:

    You lose protection against events beyond your control, including hail damage, theft, animal damage, weather damage and vandalism. You'll need to pay to repair or replace your car with no help from your insurance company.

If another driver hits you and is found at fault, their liability insurance will still pay for your damages up to their policy limits. These limits may not be enough to cover the full cost of damages to your person or property. Without full coverage or underinsured motorist coverage, you will personally be on the hook for the remainder.

Savings When You Drop Collision and Comprehensive

Dropping full coverage will give you an immediate premium reduction, up to $1,200 per year on average. Weigh that rate drop against the cost of an average claim — $5,400 for collision and $2,500 for comprehensive.   

Keep in mind there is always an element of risk involved in this decision. If your car is newer and/or more expensive, your risk is even higher.

Image showing a tradeoff matrix of dropping comprehensive and collision coverage.
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HOW TO DETERMINE YOUR ACTUAL CASH VALUE

You'll need to know the actual cash value (ACV) of your car when deciding if you drop comprehensive and collision. Because of depreciation, the price you paid for your car is likely not what it's worth (ACV).  

Don't rely on one source to calculate your ACV. Consult each of the following:  

  • Kelley Blue Book: Provides conservative estimates often used by insurers
  • Edmunds: Uses market data and tends to show higher values
  • NADA Guides: Reflects dealer pricing, usually in the middle
  • Local listings: Check sites like AutoTrader to see what cars are actually selling for

Do You Need Comprehensive and Collision Coverage: FAQ

Collision and Comprehensive Insurance: Related Articles

About Mark Fitzpatrick

Mark Fitzpatrick, Licensed P&C Insurance Expert, MoneyGeek

Mark Fitzpatrick, a licensed Property and Casualty (P&C) Insurance Producer in Connecticut, is MoneyGeek's resident expert in insurance and economics. He has spent nearly a decade covering the market, first at LendingTree and now at MoneyGeek, where he analyzes hundreds of carriers and millions of rates across auto, home, renters, health and life insurance.

His work has appeared in The Washington Post, The New York Times and NPR. He draws on independent cost and consumer experience data, and no insurance company partnerships affect his recommendations.

Mark studied at Boston College before earning a master's in economics and international relations from Johns Hopkins University. Before MoneyGeek, he worked in financial risk management at State Street. He's also a five-time “Jeopardy!” champion.

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