Do I need comprehensive and collision?

📌 Direct Answer

You need comprehensive and collision coverage if your car is financed or leased, but it is optional if you own the vehicle outright.

📊 Coverage Breakdown

• 🚗 Collision Coverage
  • Covers crashes with other cars or objects (like poles or fences).
  • Pays out regardless of who is at fault.
  • Average cost is about $473 per year.
• 🌪️ Comprehensive Coverage
  • Covers non-collision events (like theft, fire, vandalism, or hail).
  • Covers hitting animals like deer.
  • Average cost is about $421 per year.

⚖️ Do You Need It?

• ✅ Yes, if financed or leased: Lenders require both to protect their investment until the loan is fully paid off.
• 💡 Yes, if you cannot afford a replacement: If totaling your car would ruin your finances, keep both coverages even on an older car.
• 📉 No, if the car is old and paid off: Drop them if your annual coverage cost plus your deductible is higher than 10% of your car's total market value.

🗓️ Quick Rule of Thumb

Compare your car's actual cash value to your yearly insurance premium. If your car is worth $2,000 and your coverage costs $900 a year with a $500 deductible, you are paying too much for too little protection.

Collision and comprehensive insurance are worth it if your car is worth more than a few thousand dollars and you cannot easily afford to repair or replace it out of pocket.

When It Is Worth It

• You have a car loan or lease: Your lender will require both types of coverage until the vehicle is fully paid off.
• Your car has significant value: If your vehicle is worth $5,000, $10,000, or more, a total-loss accident without this coverage means losing that entire value.
• You lack emergency savings: If a sudden $4,000 repair bill or car replacement would cause severe financial hardship, the insurance acts as a safety net.
• You face high external risks: Comprehensive covers theft, vandalism, windshield cracks, severe weather, and animal strikes (like hitting a deer), which can happen even if you are a safe driver.

When to Drop It

• Your car is very old or low-value: If your car is worth less than $3,000, paying for coverage plus a $1,000 deductible often makes little financial sense.
• The 10% Rule: A common guideline is to drop collision and comprehensive if your annual premium for these coverages is more than 10% of your car's actual cash value.
• You can self-insure: If you have enough cash in the bank to easily buy another reliable car tomorrow without stress, you can skip these coverages and save on monthly premiums.

You can check guidance like Progressive's Guide on Dropping Coverage or evaluate the financial math using Forbes Advisor on Car Insurance.

If you do not have comprehensive and collision coverage, you must pay out of pocket to repair or replace your own car if it is damaged, stolen, or totaled.

What Happens Without Collision Coverage

• At-fault accidents: If you crash into another car, a tree, or a fence, your insurance pays nothing to fix your vehicle.
• Hit-and-runs: If someone hits your car and drives away, you get no payout from your own policy.
• Total loss: If your car is destroyed, you receive zero money from your insurer to buy a replacement.

What Happens Without Comprehensive Coverage

• Non-crash damage: You pay the full cost if a tree branch falls on your car, a hailstorm shatters your windshield, or a deer runs into your side.
• Theft and vandalism: If your car is stolen or keyed, you cover 100% of the financial loss.

Financial and Loan Risks

• Financing penalties: If you lease or have a car loan, your lender requires both coverages. Dropping them violates your contract and lets the lender buy expensive forced-place insurance or repossess the car.
• Unpaid loans: If a financed car is totaled in an accident, you still owe the remaining balance on the loan even though you no longer have a working car.

No, comprehensive and collision insurance are optional once your car is paid off, but whether you should drop them depends on your vehicle's value and your savings.

When to Consider Dropping Coverage

• Low car value: If your car is worth less than a few thousand dollars, paying for collision and comprehensive may cost more than the car is worth.
• High deductible: If your deductible is $1,000 and your car is only worth $2,500, your payout after an accident will be very small.
• Emergency savings: If you have enough money saved to easily repair or replace your vehicle out of pocket if it gets totaled or stolen.

When to Keep Coverage

• Can't replace it: If losing the car means you cannot get to work or you cannot afford to buy another one without a loan.
• High risk areas: If you park on the street where theft, vandalism, or severe storms are common.
• Unsure about dropping both: You can check with your insurer like Progressive to see if you can keep just comprehensive (which covers theft and weather) and drop collision to lower your monthly bill.

You do not need both collision and comprehensive coverage unless you have a car loan or lease, as financial lenders typically require both.

When You Need Both

• Financed or Leased Cars: Lenders require both to protect their financial investment until the vehicle is fully paid off.
• High Financial Risk: If paying out-of-pocket for major repairs or a complete vehicle replacement would cause you severe financial hardship, carrying both provides a safety net.

What Each Covers

• Collision Insurance: Pays to repair or replace your car if it hits another vehicle, a stationary object (like a pole or fence), or rolls over.
• Comprehensive Insurance: Pays for non-collision damage, such as theft, vandalism, fire, weather events (hail, floods), or hitting an animal.

Can You Drop One?

• Optional by Law: No state legally requires collision or comprehensive coverage—only basic liability is mandated by law.
• Dropping Collision: If your car is older and paid off, you can check with your insurer via Progressive to drop collision if the cost of the coverage outweighs the actual cash value of the car.
• Keeping Comprehensive: Even if you drop collision on an older car, many drivers keep comprehensive because it is relatively inexpensive and protects against unpreventable risks like theft, storms, and windshield damage.