Car insurance has been getting more expensive in recent years, and many drivers are looking for ways to lower their bills. One option that comes up often is dropping collision or comprehensive coverage. This can save you a lot of money—sometimes more than $1,000 a year—but it’s not the right choice for everyone. Let’s break it down in a simple way.
Why Insurance Costs Keep Rising
If you own a car, you’ve probably noticed your premiums going up. In 2024, average auto insurance costs rose by about 15%, and experts expect another 5% increase in 2025. Why?
Repairs are more expensive. Modern cars have cameras, sensors, and computer parts. Even a “small” fender bender can cost thousands.
Climate disasters. Storms, floods, and fires are becoming more common, leading to big insurance payouts.
Your personal details. Things like how often you drive, your credit history, and whether you’re married can affect your premium.
Insurers themselves are under pressure, too. In 2024, companies paid out about $1.10 in claims for every $1.00 they collected in premiums. Naturally, they pass that cost back to drivers.
What Is Comprehensive Coverage?
Comprehensive insurance covers damage from events you can’t really prevent, like theft, fire, vandalism, or a tree falling on your car.
When might you skip it?
If your car is old and not worth much, paying hundreds a year for coverage may not make sense.
If you could easily pay for repairs or even replace your car out of pocket, you might not need it.
But if you live in an area where storms, wildfires, or deer on the road are common, comprehensive might be worth keeping.
Example: Sarah owns a 15-year-old car worth about $2,000. Her comprehensive coverage costs $400 a year. If her car got totaled, she would only get its market value back. For her, the math doesn’t add up—dropping the coverage saves money.
What Is Collision Coverage?
Collision insurance pays for damage if you hit another car or object, and the accident is your fault.
When might you skip it?
A common rule is the 10% guideline: if collision costs more than 10% of your car’s value each year, it may not be worth it.
If your car is only worth $4,000 but collision coverage costs $500 a year, that’s a big chunk of its value.
If you have another vehicle in your household, or if you could afford to repair/replace your car yourself, you might decide to drop it.
Example: John’s car is worth $5,000. His collision insurance costs $600 annually. That’s more than 10% of the car’s value. John decides it’s smarter to save the $600 and take the risk.
Other Ways to Lower Insurance Costs
If you’re not ready to drop coverage completely, here are a few other tips:
Raise your deductible (the amount you pay before insurance kicks in).
Bundle policies, like auto and home, with the same insurer.
Ask about discounts for security systems, safe driving, or automatic payments.
Take a defensive driving course.
Shop around and compare quotes from multiple companies.
Bottom Line
Dropping collision or comprehensive coverage can definitely save you money—sometimes over $1,100 a year. But before you make the decision, think about your car’s value, how much you drive, and whether you could afford repairs or replacement on your own.
If your car is paid off, old, or low in value, dropping one or both coverages could be a smart move. On the other hand, if your car is newer or you rely on it heavily, keeping the extra protection might give you peace of mind.
In short, the choice depends on your personal situation—but knowing the pros and cons will help you make the best decision for your wallet.
