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Should You Drop Collision and Comprehensive Coverage? A Cost-vs-Risk Guide

Last Updated on January 28, 2026

If your car insurance premiums are getting too expensive, you may be wondering whether it’s time to drop comprehensive and collision coverage. For many drivers, liability coverage alone is enough—but not always. Some situations make dropping these coverages risky or even impossible. Below, we break down what collision and comprehensive insurance really cover, when you need them, and when it makes sense to remove them to lower your premiums.

Key Takeaways

Collision covers crash damage; comprehensive covers theft, vandalism, weather, and more.
You may drop these coverages if your car is older, low-value, or inexpensive to repair.
Leased and financed vehicles almost always require both comprehensive and collision.
Keep these coverages if you live in a high-risk area or can’t afford major repairs out of pocket.

Quick clarity: Most people use “full coverage” to mean liability + collision + comprehensive. Liability is required in almost every state, while collision and comprehensive mainly protect your car.

Coverage	What it pays for	Common examples	Usually required if financed/leased?
Collision	Damage to your car from a crash (regardless of fault)	Rear-end accident, hitting a pole/guardrail, single-car crash	Yes
Comprehensive	Non-crash damage to your car	Theft, vandalism, hail, falling tree branch, fire, animal damage	Yes
Liability	Other people’s injuries/property damage you cause	Repairs to the other car, medical bills, legal costs	Required by law in most states

Table Of Contents

What Exactly Is Collision Coverage?
What Exactly Is Comprehensive Coverage?
When It Makes Sense to Keep (or Add) Comprehensive & Collision
What About Leased and Financed Vehicles?
How to Decide: The Break-Even Method (With Examples)
Ways to Lower Your Premium Without Dropping Coverage
FAQ About Dropping Coverage
Final Word

5-minute checklist:
• If your car is financed or leased → you usually must keep collision + comprehensive.
• If your car’s value minus deductible is less than 1–2 years of comp/collision premiums → dropping may make sense.
• If you can’t comfortably pay for a major repair or replacement out of pocket → consider keeping at least one of them.
• High theft/vandalism or severe weather area → comprehensive is often worth it, even on older cars.

What Exactly Is Collision Coverage?

Every driver must carry liability insurance, which pays for the other driver’s repairs and medical bills if you cause an accident. However, liability coverage does not cover your own vehicle.

Collision coverage pays to repair or replace your car if it’s damaged in a crash—regardless of who caused it. Collision applies when:

You hit another car
You hit an object (guardrail, pole, tree, etc.)
Another driver hits you and is uninsured or underinsured

Without collision coverage, you must pay out of pocket for your own vehicle repairs if you’re at fault. Because collisions are one of the most common causes of vehicle damage, dropping this coverage can leave you financially vulnerable.

What Exactly Is Comprehensive Coverage?

Comprehensive coverage protects your vehicle from damage that isn’t caused by a crash. It covers events that happen when your car is parked or situations beyond your control, including:

Falling tree branches
Vandalism
Theft
Weather damage (hail, hurricanes, tornadoes, blizzards)
Fire or explosion
Animal collisions

Comprehensive does not cover crashes where your vehicle hits another vehicle or object—that’s collision. But combined, the two cover most types of physical damage your car could experience.

Other optional coverages include uninsured motorist insurance, which protects you if someone without proper insurance hits you.

When It Makes Sense to Keep (or Add) Comprehensive & Collision

In some cases, dropping these coverages is a bad idea. You may want to keep comprehensive and collision if:

You have a teen or inexperienced driver using your vehicle
You live in an area prone to severe weather
Your neighborhood has high rates of theft or vandalism
Your vehicle is newer or expensive to repair

For many drivers, the peace of mind and financial protection are worth the additional premium.

What About Leased and Financed Vehicles?

If you have a leased car or a financed vehicle, you almost certainly cannot drop collision or comprehensive coverage. Lenders and leasing companies require both coverages—often with higher liability limits—because the car is technically their asset until you pay it off.

Even if premiums feel high, these coverages are required to protect the lender from loss if the vehicle is damaged.

How to Decide: The Break-Even Method (With Examples)

If you drop collision and/or comprehensive, the big question is whether the premium you save is worth the risk of paying for a major loss yourself.

Step 1: Estimate your car’s current market value (what it would sell for today).
Step 2: Find your annual cost for collision and comprehensive (premium).
Step 3: Note your deductible(s).
Step 4: Use this quick rule:

Rule of thumb: If 1–2 years of comp/collision premium is close to (or more than) your likely payout (car value − deductible), dropping may be reasonable—if you could replace/repair the car without stress.

Example	Car value	Deductible	Annual comp + collision premium	Simple takeaway
Older commuter	$4,000	$1,000	$700	Potential payout ≈ $3,000. If you’d rather save $700/yr and can handle a loss, dropping one/both can make sense.
Mid-value vehicle	$12,000	$1,000	$900	Potential payout ≈ $11,000. Keeping coverage is often reasonable—especially if replacement would hurt your budget.
High-value / newer	$28,000	$500	$1,100	Potential payout ≈ $27,500. Dropping usually isn’t worth the risk unless you have a large emergency fund.

Ways to Lower Your Premium Without Dropping Coverage

If you want to save money but don’t want to lose protection, try these moves first:

Raise your deductible (often the fastest way to cut comp/collision cost).
Re-shop rates (different insurers price the same risk very differently).
Confirm your mileage (overestimated annual miles can inflate premiums).
Ask about discounts (bundling, safe driver, anti-theft devices, pay-in-full, paperless).
Review add-ons you may not need (rental reimbursement, roadside, custom equipment).

Tip: Before you drop coverage, review your entire policy for savings opportunities. This guide can help: Why it’s important to review your car insurance policy.

FAQ About Dropping Coverage

Should I drop collision coverage on an older car?

You might. If your car’s value is low and the cost of collision coverage plus your deductible is more than the vehicle is worth, dropping the coverage can save money. But if you can’t afford to replace the vehicle or you still rely on it heavily, keeping collision may still be wise.

Does comprehensive coverage cover vandalism, theft, or weather damage?

Yes. Comprehensive covers non-collision damage such as vandalism, theft, fallen trees, storms, hail, fire, and animal impacts. If you drop comprehensive, you pay for these damages out of pocket.

Is it possible to drop collision or comprehensive if my car is financed?

No. If your vehicle is leased or financed, your lender requires both collision and comprehensive coverage until the loan is paid off. Dropping these coverages violates your finance agreement.

How do I know when it’s safe to drop full coverage?

A common guideline is to compare your car’s market value with your deductible and annual premium. If the coverage costs more than the car is worth, or if you could afford to repair or replace the car yourself, dropping full coverage may make sense.

Does liability insurance cover my own vehicle damage?

No. Liability only covers damage you cause to others. It does not pay for repairs to your own vehicle after a crash, theft, vandalism, or weather event.

What risks do I take by dropping collision or comprehensive?

If you drop collision or comprehensive, you must pay out of pocket if your car is damaged in a crash, stolen, vandalized, or hit by severe weather. Make sure you’re financially prepared before removing coverage.

Final Word

Whether you should drop these coverages comes down to the value of your car, your financial cushion, and your risk tolerance. Here are some general guidelines:

If your car is old or low-value, dropping collision or comprehensive may save more than they’re worth.
If your deductible is higher than your car’s value, the coverage may not make financial sense.
If you can afford to replace or repair your car out of pocket, you may not need full coverage.
If you live in a high-risk area, dropping coverage may leave you exposed to expensive losses.

Full coverage can feel expensive, but you’ll be grateful you kept it if a tree falls on your car or you get into a crash. On the other hand, if you drive an older vehicle, the extra premiums might not be justifiable.

Ultimately, the decision depends on your vehicle’s value, your financial situation, and how much risk you’re willing to take.