Car Insurance I just paid off my 2005 Chevy. The body is in good shape, and the car runs well. Should I drop my collision coverage? By Barbara Marquand | Posted on September 27, 2011 Why you should trust Insure.com Quality Verified At Insure.com, we are committed to providing honest and reliable information so that you can make the best financial decisions for you and your family. All of our content is written and reviewed by industry professionals and insurance experts. We maintain strict editorial independence from insurance companies to maintain editorial integrity, so our recommendations are unbiased and are based on a comprehensive list of criteria. Don’t rush to drop collision and comprehensive coverage to save on car insurance rates until you’ve calculated whether this is the right move for you. Unlike liability car insurance, which is required by most states, collision and comprehensive are optional. Collision pays for repairs or replacement if the car is damaged or totaled in a traffic accident, and comprehensive pays for repairs or replacement if the car is stolen or damaged by something other than a traffic wreck, such as vandalism, fire, natural disaster or collision with an animal. Although collision and comprehensive are optional according to state laws, a lender may require a borrower to carry both. Now that you’ve paid off the car, you’re free of that obligation. However, that doesn’t automatically mean dropping the coverage is a good idea. First consider how much the car is worth now. It typically doesn’t make sense to buy collision and comprehensive for a car worth less than $1,000, according to the Insurance Information Institute, although some other experts peg the break-off point at $2,000 to $4,000. Also consider whether you’d be able to afford repairs or the purchase of a replacement vehicle without insurance. Even if the car is worth only $3,000, collision insurance would save the day if the car was totaled and you had no financial resources to replace the vehicle. If you decide to maintain collision and comprehensive insurance coverage, consider other cost-saving strategies, such as raising the deductible or taking advantage of low-mileage discounts, if you qualify. If you drop collision and comprehensive, set aside the money you save on auto insurance to pay for repairs or eventual replacement of the vehicle. For more, see our Guide to Insurance for Collisions. In case you missed it Best Car Insurance Companies of 2023 Car insurance rates by state: The most expensive and cheapest states for car ins... What is Full Coverage Car Insurance? A complete guide to car insurance costs for seniors A complete guide to adding a teenager to your car insurance policy What to do after a car accident that’s not your fault Total warfare: What to do when your auto insurer totals your car Car insurance claims: Who gets the claims check? Buying and insuring a used car: Most and least expensive models to insure in 202... The Best Car Insurance for Bad Credit of 2021 The best car insurance companies for speeding tickets Car insurance after a DUI Guide to Car Insurance Discounts Proper insurance coverage for college-bound children How to read (and actually understand!) your auto insurance policy Car Insurance Companies New driver insurance grace period: What you need to know How much do insurance agents make Autonomous cars: 5 delightful and 5 distressing things Busted! Part 1: How insurance companies spot bogus claims Insurance options for rideshare drivers 10 things that are illegal but shouldn’t be 1/1