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When does my car no longer need full coverage?

November 28, 2018

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By Mike Tangorra

If you decide to drop full coverage, understand what won’t be covered. When people refer to full coverage, what they’re really talking about is comprehensive, collision, and liability on one policy. Liability protects another person and their property if you cause an accident. Collision is coverage when the driver is at fault and wants to fix his or her own vehicle. Comprehensive generally covers everything else that isn’t the result of a crash. A few examples of this would be hail damage, hit a deer, theft or a crack in your windshield.

There are several factors to consider when making the decision to no longer carry full coverage on your vehicle. Whatever other reasons there might be for dropping full coverage on your car, one foundational reason would be: do you still have a loan on your vehicle. If so, then the bank might not allow you to delete the comp. or collision coverage.

The next consideration, after your loan is paid off, or if you have no loan because you paid for the car in full up front, is the value of your vehicle. You want to know if your car is worth the price of paying for full coverage on it.

But just because you can drop full coverage doesn’t mean it is necessarily a good idea. The key here is balance between risk tolerance and affordability. You don’t want to have more coverage than you need because it is essentially wasting money. But at the same time, you don’t want to be underinsured for an accident that you might be at fault for. If so, you could be looking at a large lawsuit against yourself.