CarInsurance.com Insights
- If you have enough savings to cover potential repair or replacement costs, you can cancel collision and comprehensive coverage.
- Liability-only insurance leaves you financially exposed in at-fault accidents. Your policy covers damages you cause to others, but pays nothing for your totaled vehicle, meaning you fund 100% of replacement costs out of pocket.
- According to CarInsurance.com rate analysis, drivers switching from full coverage to liability-only save an average of $1,544 annually; full coverage averages $2,578 per year, while liability-only costs $1,034.
- Keeping full coverage is a good idea if you depend on your car for daily commuting or often drive in busy traffic areas.
Is full coverage really worth it on an 18-year-old car? It’s one of those questions that could sneak up on you the moment your insurance bill hits your inbox.
It’s fair to pause and ask whether carrying full coverage insurance still makes sense. Deciding whether to keep full coverage on an older car is essentially choosing between two options: one offers more protection but costs more, while the other saves money but requires you to navigate risks yourself.
For many drivers, this decision sits at the crossroads of logic, peace of mind and personal finances. Comprehensive coverage (insurance that pays for non-collision damage like theft, vandalism, or weather) and collision coverage (protection for crash-related damage to your vehicle) can offer reassurance, but on an older vehicle, they may cost more over time than the car is actually worth.
In this guide, we’ll break down the real costs, explore situations where full coverage still makes sense and help you decide what’s right for your specific situation, so you can make a confident, informed decision.
Sophie’s Wise Words
Compare the annual premium cost to your car’s current value. If your premiums exceed 10% of your vehicle’s worth, dropping collision and comprehensive coverage may save you money without sacrificing essential coverage.
When should you drop full coverage on an older car?
You should consider dropping full coverage on an older car when the cost of maintaining it no longer makes financial sense compared to the car’s actual value. As vehicles age, they depreciate, but insurance premiums for comprehensive and collision coverage may remain relatively high.
Here are some key situations when dropping full coverage may be the right move:
- Your car’s current market value no longer justifies the premium cost: If your vehicle’s value is only a few thousand dollars, an insurance payout after a deductible may not justify the cost of full coverage. Most insurance experts recommend dropping collision and comprehensive when your car’s value falls below $3,000-$4,000.
- When you can comfortably cover repairs or replacement: If you have enough savings to pay for repairs or replace the car out of pocket, the added protection may no longer be necessary.
- When the car is paid off: Once you no longer have a loan or lease, you’re not required to carry full coverage, giving you the flexibility to reassess your insurance needs.
- Cost-to-value comparison: If the combined cost of your comprehensive and collision premiums equals or exceeds 10% of your car’s actual cash value each year, full coverage may no longer be cost-effective.
What happens if your old car is totaled with only liability insurance?
If your old car is totaled and you only have liability insurance, your insurance won’t pay you for the car and this catches many people off guard.
Liability insurance is the bare minimum required by law, and it’s designed to protect others. If you cause an accident, your liability policy will cover the other driver’s repair bills and medical costs, but if you total your own vehicle? That’s on you to figure out.
What if the other driver caused the accident?
Now, if the other driver caused the accident, you’re in a better position. You can file a third-party claim through their liability insurance, and they should cover your vehicle damage up to their policy limits. You’ll need proper documentation: Police reports, photos and witness statements to support your claim.
What are your options after a total loss with liability-only?
You have some options when your car is totaled and you’re not carrying comprehensive or collision coverage:
- Sell the totaled car: Many buyers purchase damaged vehicles for parts or salvage, which can give you some cash to put toward a replacement.
- Pursue legal action: If the other driver was at fault but uninsured or underinsured, you can sue them in small claims court or in civil court for larger amounts.
- Pay for the repairs yourself: If the damage isn’t catastrophic and you really want to keep the car, you can pay out of pocket to fix it, though you’ll likely end up with a salvage title.
- Accept the loss: Sometimes, the most practical move is to move on and use whatever resources you have to get another vehicle.
Liability-only insurance is cheaper, but it comes with a catch: it doesn’t help when your own car is damaged in an accident. That trade-off can feel manageable until your car is totaled and you’re suddenly covering the loss yourself or left without a vehicle. The only exception is when another driver is at fault and their insurance steps in.
How much money can you save by dropping full coverage?
On average, dropping collision and comprehensive coverage can save you an average of $1,283 a year. Full coverage typically costs $2,578 annually, compared to $1,034 for liability-only insurance, according to CarInsurance.com data.
On top of that, drivers who shop around and compare quotes save an average of $1,245 per year, making comparison shopping one of the easiest ways to cut insurance costs.
Our insurance experts suggest that even if your vehicle is old but has high market value, you should carry a full coverage policy to make sure you’re covered in the event of an accident.
Taking the time to review your coverage can help you strike the right balance between protection and affordability without paying more.
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What’s the best alternative if you’re unsure about dropping full coverage?
If you’re unsure about dropping full coverage entirely, you can drop collision coverage while keeping comprehensive coverage. You’ll still be protected against non-collision events like theft, fire, vandalism, weather damage or hitting an animal, while paying less than you would for full coverage.
Sophie’s Navigation Tip
According to the Insurance Institute for Highway Safety, comprehensive coverage often costs just $134 per year and protects against risks you can’t control, like theft or hail damage. For older cars, this hybrid approach offers smart protection without the high cost of collision coverage.
Here are some other alternatives to consider:
Increase your deductible
Raising your deductible lowers your monthly premium while still keeping comprehensive and collision coverage in place. This works well if you have savings set aside to cover a higher out-of-pocket cost in the event of a claim.
Remove unnecessary add-ons
Optional coverages such as rental reimbursement, roadside assistance, or gap coverage may no longer be needed, depending on your situation. Removing them can reduce costs without sacrificing core protection.
Switch to usage-based or pay-per-mile insurance
If you don’t drive often, these programs can significantly reduce premiums while still offering full coverage when you’re on the road.
These options allow you to maintain adequate coverage while controlling costs, making them ideal if you’re not fully comfortable with the financial risk of going without full coverage.
Frequently Asked Questions: Full coverage for older vehicles
Should I keep full coverage on an old car with high mileage?
Whether you should keep full coverage on an old, high-mileage car depends on the car’s value, your finances and your risk tolerance. If the vehicle’s market value is low, the maximum payout from comprehensive and collision coverage may be only slightly more than what you’ve already paid in premiums and deductibles, making full coverage less cost-effective.
On the other hand, if you rely heavily on the car and can’t easily afford to repair or replace it after an accident, keeping full coverage may provide peace of mind.
Can I add full coverage back later if I drop it now?
Yes, if you drop full coverage now, you can usually add it back later, as long as the vehicle still qualifies. Keep in mind that insurers often require an inspection or photos before reinstating comprehensive and collision coverage, and your premium may change based on your driving history, claims and vehicle condition. If the car has existing damage or a salvage title, full coverage may be limited or denied.
Will my insurance company notify me when it’s time to drop coverage?
In most cases, your insurance company will not notify you when it’s time to drop coverage. Insurers typically won’t track your loan payoff, vehicle value or personal financial situation for you, so the decision about changing coverage is up to you.
It’s your responsibility to review your coverage and decide whether carrying a full coverage policy still makes sense for your vehicle and budget.
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