When should you drop full coverage on your car?

You should drop full coverage insurance on your car when the cost of the insurance equals or exceeds the potential payout, should a covered event occur. You may also want to drop full coverage if you are willing to pay for repairs out of pocket, or if you would prefer to replace your vehicle if it’s damaged. 

For example, an older car with high mileage may not be worth costly repairs, and you might want to save for a new car instead of paying for extra insurance. Similarly, a driver who uses their car infrequently might take the gamble of dropping full coverage, since they are statistically less likely to damage their vehicle.

You should consider dropping full coverage car insurance when...

• Your car is old or has a lot of miles. The less valuable your car is, the less likely it is that you need much coverage beyond your state’s requirements. A good rule of thumb is that when your annual full-coverage payment equals 10% of your car’s value, it’s time to drop the coverage.
• You have a big emergency fund. If you don’t have any savings, car damage might leave you in a severe bind. In that case, the money you spend on full coverage insurance will protect you from insurmountable repair bills. Consider keeping your full coverage insurance until you have some savings built up.

For those who aren’t quite sure what it means exactly, “full coverage” is a catch-all term for insurance that covers you, other drivers, and your vehicles. It generally includes both collision and non-collision insurance. In other words, there is no single policy for "full coverage" car insurance. Instead, you select a combination of coverages that you feel is enough to handle all aspects of a car collision. With a well-rounded collection of coverages, you are “fully” protected from a variety of vehicular hazards, ranging from injuries and collision damage to weather events, encounters with wildlife, and vandalism.

However, it’s important to remember that different states require different levels of coverage. Make sure to check state requirements before making any changes to an insurance policy.

With that being said, it’s wise to get full coverage for a new, rare, or expensive car. A $40,000 truck is worth the few hundred dollars a year for full coverage insurance, for example. Otherwise, you run the risk of having to drop another $40,000 on a new truck if you’re involved in a serious accident.

In my personal opinion, I look at the value of the vehicle and if I can afford that loss in the event of an accident.  I also look at the miles driven daily.  I take the premium into consideration as well.  Example, doesn't make sense to pay $100/mo for a vehicle that is only worth $1500 or may sit around and be driven 1,000 miles / year.

Comprehensive coverage is usually inexpensive compared to collision and it's something I myself personally, would keep on a vehicle.  

Comprehensive coverage protects you in the case of: 

• Theft
• Vandalism
• Fire
• Natural disasters (like a hurricane or a tornado)
• Falling objects
• Damage done to your car by animals
• A civil disturbance (like a riot that results in damage or destruction of your car)

Please remember that this answer is based on my own personal opinion.  You should speak to your agent to help you weigh your options and understand a little more.  Hope that helps!