Pull up your auto insurance declarations page and find two line items: collision and comprehensive. Together they are what everyone means by “full coverage.” On a car you paid off four years ago, they are also the only part of that bill you are allowed to cancel outright. Liability is mandatory in almost every state. Those two are optional the second your lender releases the title, and plenty of people keep paying for them for a decade after that without ever running the math.
The math is not complicated. It is just annoying enough that most of us never do it.
What full coverage actually costs you
Insurance.com puts the 2026 national average for a full coverage policy at $2,578 a year, or roughly $215 a month, using 100/300/100 liability limits and $500 deductibles. A state minimum liability policy averages $738. Experian’s 2026 numbers run higher, around $2,922 for full coverage and $1,580 for minimum, because every tracker uses a different driver profile and a different mix of states. Pick whichever you like. The direction is the same.
Here is the trap in those comparisons, though. The gap between “full coverage” and “state minimum” is not what you save by dropping collision and comprehensive, because state minimum liability is also far thinner protection than 100/300/100. If you drop collision and comprehensive and leave your liability limits alone, which is what you should do, your savings is smaller and much more specific: it is whatever your insurer charges for those two coverages on that one vehicle. Your declarations page breaks it out by car. If it does not, one phone call gets you the number in about ninety seconds.
For a paid-off sedan with some age on it, that number is often somewhere between $300 and $900 a year. Sometimes more, if you live somewhere with hail or a theft problem.
The 10% test
The rule of thumb that insurance agents use themselves: add up the annual premium for collision and comprehensive on that vehicle, then divide it by what the car is actually worth. If the answer is more than 10%, the coverage is no longer buying you much.
Check the value on Kelley Blue Book using private party value, not what you believe the car is worth because you remember what you paid for it. A 2011 Camry with 190,000 miles is not a $6,000 car just because you have been loyal to it.
Then do the second half of the calculation, which matters more than the first. Insurance pays the car’s actual cash value minus your deductible. That is the ceiling. If the car books at $3,400 and you carry a $1,000 deductible, the absolute most you will ever collect on a collision claim is $2,400, and you only collect it by wrecking the car badly enough to justify the claim. Paying $700 a year for a maximum $2,400 payout is a bad trade after about three years, and it is a worse trade every year after that as the car keeps depreciating and the premium does not.
Why old cars get totaled so easily
Insurers declare a total loss when estimated repairs cross a percentage of the car’s value. That threshold is set by state law in some places and by company policy in others, and it commonly lands somewhere in the 70% to 80% range.
Do that math on a thirteen-year-old car worth $3,400. A crumpled quarter panel, a sensor, and a couple days of labor gets you past $2,600 without much effort. The car is totaled. You receive $2,400 after the deductible, the insurer takes the car, and you go shopping. That outcome is fine if the check meaningfully closes the gap on a replacement. It is close to pointless if the check is barely more than two years of premiums you already paid.
This applies to more drivers than it used to. S&P Global Mobility put the average age of a vehicle on American roads at 12.9 years in 2026, another record. The typical car in the typical driveway is exactly the car this decision is about.
Keep one, drop the other
Dropping full coverage is usually presented as a single yes or no. It is really two separate questions, and the answers are often different.
Collision covers you hitting something, or something hitting you when nobody else’s insurance pays. Comprehensive covers theft, fire, flood, hail, falling branches, a deer at dusk, and a rock through the windshield. Comprehensive is almost always the cheaper of the two, and according to the Insurance Information Institute, the average comprehensive claim ran about $2,738 against roughly $5,992 for the average collision claim. You are buying a smaller benefit, but you are buying it for a lot less money.
So the middle path exists: drop collision, keep comprehensive. That works well for a car that sleeps outside, lives in a hail belt or a high theft zip code, or racks up low annual mileage where your own crash risk is modest but the sky and the neighborhood are not.
The other middle path is raising your deductible instead of cancelling anything. Going from $500 to $1,000 often cuts the collision premium enough to matter, and it keeps a floor under a catastrophic month.
The condition that makes this safe
None of this works without cash.
The entire argument for dropping collision is that you have agreed to self-insure the car, and self-insuring means the money exists somewhere other than in your imagination. Ask yourself one question honestly: if the car became undrivable on a Tuesday, could you replace it without financing it at whatever rate a dealership offers someone in a hurry?
If the answer is no, keep the coverage until it is yes. If the answer is yes, then cancelling is a reasonable trade, and the premium you free up has an obvious job. Route it into a separate high-yield savings account earmarked for the next car and set the transfer to run automatically on payday so you never see it as spendable. Six hundred dollars a year is not glamorous. It is also a real down payment three years from now, which is more than your old collision coverage was ever going to hand you.
Skip this entirely if the car is financed or leased. Your lender requires full coverage and will buy it for you at an ugly price if you let it lapse. Skip it too if the car is the only way anyone in your house gets to work and there is no backup.
How to actually make the change
Call your insurer and ask for the premium broken out by coverage and by vehicle. Then ask three specific prices: the policy as it stands, the policy with collision removed from that one car, and the policy with both collision and comprehensive removed. Agents will quote this without argument, and seeing the three numbers side by side usually ends the debate in under five minutes.
Two things to watch. Removing comprehensive can also remove glass coverage and rental reimbursement, depending on how your policy is written, so ask what else falls off. And if there is still a lienholder listed on the policy from a loan you finished paying, get that record cleared first or the change may be rejected.
Then do the part people skip. Move the savings into the replacement fund the same week you make the change, before it quietly becomes grocery money. The CFPB has a straightforward walkthrough on automating transfers if you want the mechanics.
Pull the declarations page tonight. If collision and comprehensive cost more than a tenth of what the car would fetch on Facebook Marketplace, you already know what the number is telling you.
