How we put this guide together: we used MoneyGeek’s October 2026 guidance on dropping physical-damage cover and CarInsurance.com’s 2026 averages. Examples are illustrations, not quotes. See our advertiser disclosure.
Get the best car insurance rates in your location
Select two or more insurance companies to compare rates where you live. Free, no obligation.
Sponsored listings. Insuretro may be paid if you click a listing; it doesn’t change your price.What “full coverage” actually includes
“Full coverage” isn’t a single product. It usually means three things together:
- Liability: pays for injuries and damage you cause to others. Required in nearly every state.
- Collision: pays to repair or replace your own car after a crash, minus your deductible.
- Comprehensive: pays for theft, fire, hail, flooding, falling objects and animal strikes.
Dropping full coverage means removing collision and comprehensive and keeping liability. In CarInsurance.com’s 2026 data, full coverage averaged $2,578 a year against $829 for liability-only at 50/100/50 limits.
The 10% rule
MoneyGeek suggests weighing whether to drop collision and comprehensive when their yearly cost is more than 10% of your car’s value. Some other signs it may be time:
- Your car is worth less than about $7,500 (an older benchmark was $5,000).
- The car is paid off. Lenders and leasing companies require collision and comprehensive until the loan ends.
- You have savings to repair or replace the car if it is wrecked or stolen.
Worked example
Say your car is worth $5,000 and collision plus comprehensive cost you $900 a year. That is 18% of the car’s value, well over the 10% line. After a $500 deductible, the most a total-loss claim could pay is about $4,500, and the car loses value every year. Dropping those coverages would save the $900 a year, at the cost of paying for any damage yourself. (Illustration only; your figures will differ.)
Savings tip: before dropping cover completely, ask for a quote with a higher deductible. Going from a $500 to a $1,000 collision deductible typically saves $100–$200 a year, according to MoneyGeek, and keeps you protected against a total loss.
A quick checklist before you drop it
- Look up your car’s value using a pricing guide, based on its mileage and condition.
- Ask your insurer for the cost of collision and comprehensive separately. Your declarations page often shows each coverage’s premium.
- Do the 10% test: divide the yearly cost of the two coverages by the car’s value.
- Check your savings: could you replace the car tomorrow without borrowing?
- Confirm you have no loan or lease on the car.
- Consider the middle options: a higher deductible, or keeping comprehensive only.
- Keep liability above the state minimum if you have assets to protect.
When to keep full coverage
- You still owe money on the car or lease it.
- The car is worth more than you could comfortably replace from savings.
- You live somewhere with frequent hail, flooding or car theft, where comprehensive claims are more likely.
- You rely on the car for work and couldn’t manage without it after a crash.
Average claims are large relative to many older cars’ value: MoneyGeek puts the average collision claim at about $5,400 and comprehensive at about $2,500.
What happens if you crash without collision cover
Say you drop collision on a car worth $4,000 and later cause a crash. Your liability cover pays for the other driver’s car and injuries, up to your limits. Repairs to your own car are yours to pay. If the damage is more than the car is worth, you would typically take the loss and replace the car yourself. If the other driver is at fault, their liability insurance should pay for your car instead, though claims can take time, and uninsured motorist property damage cover (required in some states, optional in others) can help if they have no insurance.
Comprehensive works the same way for theft, hail or a tree falling on the car: without it, those costs are yours. That’s why the decision really comes down to whether you could absorb the loss of the car without hardship.
A middle option: keep comprehensive only
Comprehensive is usually much cheaper than collision. Some drivers drop collision but keep comprehensive, so they are still covered for theft, hail or a falling tree. Ask your insurer whether it allows this; some require collision and comprehensive together.
Don’t cut liability too far
When you drop to liability-only, it’s tempting to drop to your state’s minimum limits too. That can be a false economy. In CarInsurance.com’s 2026 averages, 50/100/50 liability cost $829 a year versus $738 for state minimum, only about $90 more for much higher protection if you injure someone or damage an expensive car.
Your state’s minimum liability limits
If you drop to liability-only, you still have to carry at least your state’s minimum. Limits are written as three numbers: bodily injury per person / bodily injury per accident / property damage, in thousands of dollars. So 25/50/25 means $25,000 per injured person, $50,000 per accident and $25,000 for damage to property.
| State | Minimum liability | Other required cover |
|---|---|---|
| Alabama | 25/50/25 | – |
| Alaska | 50/100/25 | – |
| Arizona | 25/50/15 | – |
| Arkansas | 25/50/25 | – |
| California | 30/60/15 | – |
| Colorado | 25/50/15 | – |
| Connecticut | 25/50/25 | UM/UIM |
| Delaware | 25/50/10 | PIP |
| Florida | No BI required; $10,000 PD | PIP |
| Georgia | 25/50/25 | – |
| Hawaii | 40/80/20 | PIP |
| Idaho | 25/50/15 | – |
| Illinois | 25/50/20 | UM |
| Indiana | 25/50/25 | UM/UIM unless rejected in writing |
| Iowa | 20/40/15 | – |
| Kansas | 25/50/25 | UM/UIM, PIP |
| Kentucky | 25/50/25 | PIP (can be rejected) |
| Louisiana | 15/30/25 | – |
| Maine | 50/100/25 | UM/UIM, MedPay |
| Maryland | 30/60/15 | UM/UIM, UMPD, PIP (waivable) |
| Massachusetts | 25/50/30 | UM, PIP |
| Michigan | 250/500/10 default (50/100/10 by election) | PIP, PPI |
| Minnesota | 30/60/10 | UM/UIM, PIP |
| Mississippi | 25/50/25 | – |
| Missouri | 25/50/25 | UM |
| Montana | 25/50/20 | – |
| Nebraska | 25/50/25 | UM/UIM |
| Nevada | 25/50/20 | – |
| New Hampshire | 25/50/25 if you buy cover* | UM/UIM, MedPay |
| New Jersey | 35/70/25 | UM/UIM, PIP |
| New Mexico | 25/50/10 | – |
| New York | 25/50/10 (50/100 for death) | UM, PIP |
| North Carolina | 50/100/50 | UM, UIM |
| North Dakota | 25/50/25 | UM/UIM, PIP |
| Ohio | 25/50/25 | – |
| Oklahoma | 25/50/25 | – |
| Oregon | 25/50/20 | UM, PIP |
| Pennsylvania | 15/30/5 | PIP (first-party benefits) |
| Rhode Island | 25/50/25 | UM/UIM unless rejected |
| South Carolina | 25/50/25 | UM, UMPD |
| South Dakota | 25/50/25 | UM/UIM |
| Tennessee | 25/50/25 | – |
| Texas | 30/60/25 | – |
| Utah | 30/65/25 | UM, PIP |
| Vermont | 25/50/10 | UM/UIM, UMPD |
| Virginia | 50/100/25 | UM/UIM, UMPD |
| Washington | 25/50/10 | – |
| Washington, D.C. | 25/50/10 | UM, UMPD |
| West Virginia | 25/50/25 | UM, UMPD |
| Wisconsin | 25/50/10 | UM, MedPay (can be rejected) |
| Wyoming | 25/50/20 | – |
Source: CarInsurance.com, minimum car insurance requirements by state, updated September 21, 2026. UM/UIM = uninsured/underinsured motorist; UMPD = uninsured motorist property damage; PIP = personal injury protection; MedPay = medical payments. *New Hampshire doesn’t require car insurance, but these limits apply if you buy it. New Jersey’s limits rose to 35/70/25 on January 1, 2026.
These are legal floors, not recommendations. A single serious crash can easily exceed $25,000 in injuries or $10,000–$15,000 in property damage, and you are personally responsible for anything above your limits. That is why many people dropping physical-damage cover keep, or even raise, their liability limits.
Compare the numbers for your situation in our average car insurance cost guide, or see other ways to lower your premium.
Common questions
When should I drop full coverage?
A common rule of thumb is when collision and comprehensive cost more than 10% of your car’s value a year, the car is paid off and you could afford to repair or replace it yourself. MoneyGeek suggests cars worth less than about $7,500 are candidates.
Can I drop full coverage if I have a car loan?
Usually not. Lenders and leasing companies require collision and comprehensive until the loan or lease is paid off.
How much do I save by dropping full coverage?
On average, full coverage cost $2,578 a year in 2026 against $829 for liability-only, but the saving on an older car is usually smaller because collision and comprehensive cost less on low-value vehicles.
What are the minimum liability limits in my state?
They range from 15/30/5 in Pennsylvania to 50/100/50 in North Carolina. Florida doesn’t require bodily injury liability but does require $10,000 of property damage cover and PIP. See the state table above.
Sources
- MoneyGeek: When to drop collision and comprehensive coverage (Oct 2026)
- CarInsurance.com: How much is car insurance? (Aug 2026)
- CarInsurance.com: Minimum car insurance requirements by state (Sept 2026)
Prices, discounts and rules change often and vary by state and driver. Figures were checked in October 2026; confirm details with the insurer or your state insurance department.