Drop collision insurance when your car's value falls below $5,000 and you have six months of emergency savings. Three factors guide this decision: your vehicle's actual cash value, available emergency funds and annual premium costs. Dropping collision saves $400 to $800 per year, which you can redirect toward savings or other coverage needs.
When to Drop Collision and Comprehensive Coverage
Updated: November 6, 2025
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Key Takeaways
Drop collision insurance if your car is worth under $5,000 and you have 6+ months of emergency savings to replace it out-of-pocket.
Drop collision insurance when your car is over 10 years old, worth less than $5,000, or when annual premiums exceed 10% of your vehicle's value. However, you must keep it if you're financing or leasing your vehicle.
Drop collision insurance first while keeping comprehensive coverage—comprehensive costs 40-60% less and protects against weather, theft, and animal strikes that don't decrease as your car ages.
Should I Drop Collision Insurance?
Scenario | Vehicle Age | Financial Situation | Geographic Risk | Recommendation |
|---|---|---|---|---|
Vehicle worth less than $5,000 | 6–10 years | Any emergency fund | Low | Drop both |
Vehicle worth less than $5,000 | 10+ years | Any emergency fund | Medium/High | Drop collision, keep comprehensive |
Annual premiums exceed 10% of car value | 6–10 years | Strong emergency fund | Low/Medium | Drop both |
Annual premiums exceed 10% of car value | 10+ years | Any emergency fund | Any | Drop both |
Strong emergency fund (6+ months expenses) | 6–10 years | Excellent savings | Low | Drop both |
Strong emergency fund (6+ months expenses) | 10+ years | Excellent savings | Medium/High | Drop collision, keep comprehensive |
High-mileage vehicle (150,000+ miles) | 10+ years | Good emergency fund | Any | Drop collision, keep comprehensive |
Multiple vehicle household | 6–10 years | Good emergency fund | Any | Keep on primary car, drop on secondary |
Multiple vehicle household | 10+ years | Any emergency fund | Any | Drop on oldest vehicle |
Excellent driving record, low-risk area | 10+ years | Strong emergency fund | Low | Drop both |
Older luxury vehicle with expensive repairs | 10+ years | Any emergency fund | Any | Drop both |
Pre-retirement financial planning phase | Any age | Building retirement fund | Any | Consider dropping for premium savings |
Should I Drop Collision or Comprehensive Insurance First?
Drop collision insurance first while keeping comprehensive coverage. Collision covers at-fault accidents you cause, while comprehensive protects against unavoidable risks like hail damage, theft and animal strikes—risks that remain constant regardless of your vehicle's age.
Comprehensive coverage costs 40-60% less than collision ($367 vs. $814 annually), providing better value for older vehicles. Your driving skills may improve over time, reducing collision risk, but weather patterns and theft rates in your area don't change as your car ages.
Vehicle’s age and value | The car is under five years old or worth more than $5,000 | The car is over 10 years old and worth less than $5,000 |
Loan or lease status | The car is financed or leased (coverage usually required) | The car is fully paid off |
Emergency savings | You don’t have enough saved to replace your car | You can afford to replace your car out-of-pocket |
Risk tolerance | You prefer financial protection and peace of mind | You’re comfortable taking the risk of paying for repairs |
Driving habits and exposure | You drive often in high-traffic, accident-prone or harsh-weather areas | You drive infrequently or in low-risk, local environments |
WHAT HAPPENS AFTER YOU DROP COLLISION COVERAGE
Your insurance no longer covers damage to your vehicle from accidents you cause or single-vehicle collisions. If you hit another car, a tree or a guardrail, you pay all repair costs out-of-pocket. Your liability coverage still covers damage you cause to other vehicles and property—only damage to your own vehicle is no longer covered.
Comprehensive coverage remains active if you kept it, providing protection against theft, vandalism, weather damage and animal strikes. Your liability coverage continues to protect you if you cause injury or property damage to others. You've only eliminated the collision portion, not your entire policy.
Should I Drop Collision and Comprehensive Insurance Coverage?
Drop collision insurance first while keeping comprehensive coverage. Collision covers at-fault accidents you cause, while comprehensive protects against unavoidable risks like hail damage, theft and animal strikes, which remain constant regardless of your vehicle's age. Your driving skills may improve over time, reducing collision risk, but weather patterns and theft rates in your area don't change as your car ages.
Exposure to weather risks | You live in an area prone to hail, flooding, hurricanes or wildfires | Your area has stable weather with low risk of natural damage |
Vehicle theft risk | Your car is parked on the street or in a high-crime area | You park in a secure garage and live in a low-crime area |
Vehicle’s ACV | The car is still worth more than $5,000 | The car is worth less than $5,000 |
Emergency savings | You can’t easily afford out-of-pocket replacement after theft or damage | You have enough savings to self-insure against these losses |
Animal and vandalism risk | You drive through rural areas or have had prior animal or vandalism claims | No history or likelihood of animal strikes or vandalism |
How to Decide if You Should Drop Collision Insurance
Drop collision and comprehensive coverage when your premiums cost more than the protection you're getting. Once your car's value falls low enough, the insurance payout won't justify what you're paying. At that point, you'll save money by covering repair costs yourself. The 10% rule gives you a clear benchmark for this decision. Use the method below to determine if you should cancel your coverage.
Coverage Assessment Guidelines
- Car value under $5,000: Consider dropping both collision and comprehensive.
- Collision premium ÷ Car value exceeds 10%: Consider dropping collision coverage immediately.
- Emergency fund covers more than 6 months of expenses: Consider dropping both coverages.
- Financing or leasing your vehicle: Keep both (lender requirement).
Geographic Location Guidelines
- High-risk States (TX, OK, KS, FL, LA, SC, mountain/urban areas): Keep comprehensive longer due to weather and theft.
- Medium-risk States (moderate weather, suburban areas): Apply standard 10% rule guidelines.
- Low-risk States (stable weather, rural areas, garage parking): Consider dropping coverage earlier with confidence
Decision Guidelines by Vehicle Age
- 0-5 years: Keep both coverages (high value justifies protection).
- 6-10 years: Apply 10% rule and assess emergency fund strength.
- 10+ years: Drop collision in most cases; keep comprehensive only in high-risk areas.
IMPORTANT CONSIDERATIONS FOR THE 10% RULE
Always use annual premiums, not monthly premiums. A $70 monthly premium equals $840 per year, which makes a big difference in the calculation.
Don't use this rule if:
- Your car is under a loan or lease.
- You don’t have enough savings to replace it.
- You live in an area prone to bad weather or theft.
When to Drop Collision Insurance by State: Geographic Considerations
State requirements affect your collision insurance decisions. Kentucky requires motor vehicle repair insurance, which can overlap with collision coverage. New York and Florida mandate Personal Injury Protection (PIP), adding $300 to $800 to your annual premium.
These required costs make collision coverage harder to justify for older vehicles, particularly if your total premium stretches your budget.
Dropping Collision Coverage: Buying Guide
Collision insurance costs $400 to $800 yearly. You can save that money once your vehicle no longer needs the coverage. This guide explains what comprehensive coverage protects, when to drop collision insurance based on your car's age and value and how to lower your premiums without leaving yourself underinsured.
What Is Comprehensive and Collision Insurance?
Collision insurance pays for damage to your car when you hit another vehicle or object. This includes backing into a pole in a parking lot, sideswiping a guardrail, or colliding with another car (regardless of fault). Your collision coverage pays for vehicle repairs up to its actual cash value, minus your deductible. If you cause an accident by running a red light and total your car, collision coverage handles your vehicle repair or replacement even though you're at fault.
Comprehensive insurance pays for damage from non-collision events. Theft, vandalism, fire, flooding, hail, falling tree branches, and animal strikes all fall under comprehensive coverage. Comprehensive coverage pays for repairs if someone keys your car, smashes your windows, or steals your catalytic converter. When a deer runs into the road and destroys your front end, comprehensive (not collision) coverage covers the damage.
Comprehensive coverage costs 40% to 60% less than collision because comprehensive claims are usually smaller and less common. But in states with severe weather like Oklahoma or hurricane zones like Louisiana, comprehensive claims happen more often than collision claims. In these areas, comprehensive coverage offers strong value even for older cars.
How to Lower Your Car Insurance Premium by Dropping Collision Coverage
Contact your insurer to remove collision coverage and ask for written confirmation of your new rate. Savings usually start right away, based on when you cancel. Keep comprehensive and liability coverage to stay protected from theft, weather damage and injuries you cause.
- 1Verify You Meet the Requirements
Before dropping collision coverage, double-check that your car is already paid off. Lenders require it while you still have a loan or lease, so look at your title or loan statement to be sure there’s no lienholder. If you’re still paying it off, you’ll need to keep the coverage for now.
It’s also smart to look at your savings. Could you afford to replace your car if it were totaled? Many people aim to have around six months of expenses saved before taking this risk. The goal is to avoid putting yourself in a tight spot if something happens to your car.
- 2Calculate Your Exact Savings
Check your insurance declaration page to see how much you pay for collision coverage. It’s listed separately from your total premium and often costs around $600 to $900 per year for older cars. Ask your insurer for a quote without collision coverage, then compare the two amounts.
For example, if your annual premium is $1,800 and $750 of that is for collision, removing it would lower your yearly cost to about $1,050.
- 3Contact Your Insurance Company
Reach out to your insurance agent or call the company to request the removal of collision coverage. You can also log in to your online account since most insurers let you adjust coverages there. Be clear that you want to drop collision coverage but keep your comprehensive and liability coverage active.
You can ask for the change to start right away to maximize savings or set it for a future date. If you’ve already paid your premium in advance, the company will give you a prorated refund.
For instance, if you paid $1,800 for six months ($300 per month) and remove $750 in collision coverage with three months left, you’ll get a $187.50 refund ($750 ÷ 6 × 3).
- 4Verify Your New Policy Documents
When your updated declaration page arrives, check that collision coverage has been removed and that your premium matches the quote you received. Confirm that your comprehensive and liability coverage are still in place with the same limits and deductibles.
Make sure the effective date is correct, and keep both the old and new documents for your records.
- 5Adjust Other Coverage as Needed
With collision coverage removed, you can raise your comprehensive deductible to lower your premium even more. Increasing it from $500 to $1,000 can save an additional $100 to $200 per year. This option works well for drivers who have enough savings to cover the higher deductible if needed.
Use your savings from dropping collision coverage to raise your liability limits. Upgrading from the state minimum ($25,000/$50,000/$25,000) to higher limits ($100,000/$300,000/$100,000) usually costs about $150 to $250 a year.
That’s still less than the $700 to $900 you save by removing collision coverage and provides stronger protection for your assets.
HOW TO DETERMINE A CAR'S ACTUAL CASH VALUE
Actual cash value (ACV) represents what your car was worth immediately before an accident, not what you paid initially.
Don't rely on one source:
- 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
Key value factors:
- Mileage: Every 1,000 miles above average lowers the value by $200 to $400.
- Accident history: A clean record adds 10% to 15%, while accidents reduce value by 10% to 25%.
- Vehicle condition: Excellent condition increases value by 10% to 20%, while poor condition drops it by 20% to 30%
Car values also vary by region. Prices in high-cost areas like California and New York run 15% to 25% higher than average, while those in the Midwest and South are 10% to 15% lower. Insurance companies often use valuations that sit 10% to 20% below retail prices, so include photos and maintenance records to support your car’s value when filing a claim.
When to Drop Comprehensive and Collision Coverage: Bottom Line
Drop collision and comprehensive coverage when your car's actual cash value falls below $5,000, annual premiums exceed 10% of your car's value and you have enough emergency savings to cover repairs yourself.
For most drivers, this happens around 10 years or 100,000 miles. But if you're financing or leasing, you must keep both coverages because your lender requires them.
Apply the 10% rule to your car's current value. Check your emergency fund, consider your area's risk factors and review your driving record before you decide.
Drivers save an average of $814 annually by dropping collision and $367 by dropping comprehensive, $1,181 in total yearly savings for older cars. You'll save even more if you have multiple older cars or rarely drive a second vehicle.
Compare quotes from multiple insurers regularly to get the best rates for your coverage, whether you drop coverage or keep it.
Do You Need Comprehensive and Collision Coverage: FAQ
Knowing when to drop collision and comprehensive coverage depends on your car’s value and insurance costs. This section covers common questions to help you make the right decision.
Should I drop collision insurance on a 10-year-old car?
Drop collision on a 10-year-old car if it's worth less than $5,000 or annual premiums exceed 10% of its value. But 10-year-old trucks and SUVs often retain $10,000 to $20,000 in value, making collision coverage worthwhile.
Calculate the percentage for your car: annual premium ÷ car value. A percentage above 10% means you should drop coverage. Check your emergency fund, driving record and whether you can afford to replace your car out of pocket before you decide.
What happens if I drop comprehensive insurance?
You’ll lose protection against weather damage, theft, vandalism and animal collisions. Any repairs or replacements become your responsibility, from about $500 for minor hail damage to the full cost of the car if it’s totaled by a flood.
How much will I save by dropping collision coverage?
Collision coverage usually costs between $300 and $800 a year, depending on your car’s value, where you live and your driving history. Most drivers save about 30% to 50% on their premiums after removing it.
Is the 10% rule for car insurance accurate?
The 10% rule is a good guideline to start with. If what you pay each year for collision and comprehensive coverage is more than 10% of your car’s current value, the coverage usually isn’t worth keeping.
When is collision insurance not worth it?
Collision insurance isn't worth it when your car is worth less than $5,000, you have substantial emergency savings or repair costs would likely exceed the vehicle's value in most accident scenarios.
When should you drop full coverage on a car?
Drop "full coverage" (collision + comprehensive) when your car's value falls below $5,000 and you can afford replacement costs. However, never drop liability coverage—it's legally required. You can drop collision and comprehensive together or separately. Consider keeping comprehensive even on older vehicles if you live in high-weather-risk or high-theft areas, as it costs 40-60% less than collision and protects against uncontrollable events.
How much is comprehensive insurance?
Comprehensive insurance averages $367 per year nationally, but varies by state, vehicle, and driver profile. It costs 40 to 60% less than collision coverage ($814 average). In severe weather states like Oklahoma or Texas, comprehensive may cost $500 to $700/year due to higher claim frequency, while stable climate states average $250 to $350/year. Get personalized quotes to determine your exact cost based on your specific situation.
Comprehensive and Collision Coverage: Our Review Methodology
MoneyGeek collects car insurance data from multiple providers and independent agencies. Our analysis also draws on consumer research and insurer ratings from trusted sources, including:
- J.D. Power: A leading research firm known for ranking customer satisfaction in insurance and personal finance.
- AM Best: A respected credit rating agency that evaluates an insurer’s financial strength and ability to pay claims.
- Quadrant Information Services: Provides pricing data and analysis for property and casualty insurance.
- National Association of Insurance Commissioners (NAIC): A regulatory group that collects data and promotes fair insurance practices to protect consumers.
We also draw on insights from industry experts and academics in insurance and personal finance. Our expert team includes professionals with years of experience in these fields.
- Zach Shefska: Founder and CEO, Your Auto Advocate
- Kalinda Ukanwa, MBA, Ph.D.: Assistant Professor of Marketing, University of Southern California
- Karen Gordon Mills: Senior Fellow at Harvard Business School, an expert in U.S. competitiveness, entrepreneurship and innovation
MoneyGeek prioritizes your needs by following a strict editorial process that includes research, fact-checking and comprehensive review to uphold accuracy and credibility.
Collision and Comprehensive Insurance: Related Articles
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
He writes about economics and insurance, breaking down complex topics so people know what they're buying.
sources
- Kelley Blue Book. "Total Cost of Ownership Car Calculator." Accessed August 3, 2025.