When Should I Drop Collision or Comprehensive Coverage on an Older Car?

As your vehicle ages, you may wonder if it still makes sense to carry collision or comprehensive coverage on your auto insurance policy. At Kiero Insurance & Multiservices, LLC, we help our clients evaluate their insurance needs so they can make informed decisions that fit their budget while maintaining valuable coverage.

Key Factors to Consider

Before removing any coverage, look at these variables first:

• Your car’s actual cash value: Check a reliable pricing source to understand what your vehicle is currently worth.
• Deductible: If your deductible is close to your car’s value, the coverage may offer limited benefit in a claim.
• Your financial situation: Could you comfortably replace or repair the vehicle out of pocket if it were totaled or stolen?
• Usage: A vehicle driven daily may carry more exposure than one parked most of the time.
• Lender’s requirements. If you’re still financing the car, your lender may require you to carry both coverages, regardless of the car’s age.

When Might It Make Sense to Drop Coverage?

There is no universal rule, but you may reconsider collision or comprehensive coverage if your car’s value has dropped significantly or if your annual premiums exceed 10% of its actual cash value. If the car is paid off, older and worth relatively little, dropping one or both coverages may be reasonable.

A Note on Uninsured/Underinsured Motorist Coverage

Uninsured/underinsured motorist (UM/UIM) coverage applies specifically when an at-fault driver has no insurance or insufficient insurance to cover your damages. It is not a substitute for collision coverage, which pays regardless of fault. Texas insurers are required to offer UM/UIM coverage, but you can reject it in writing. Given the prevalence of uninsured drivers, retaining UM/UIM is worth discussing with our team when reassessing your coverage.

How We Can Help

Kiero Insurance & Multiservices, LLC is here to help you review your policy and weigh your options. We’ll walk you through the numbers and help you decide what makes sense for your situation. Contact us today for a quote.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.