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Simple Tips for Life’s Unpredictable Moments

Can You Drop Insurance for a Low-Value Car?

Learn about state insurance mandates and the restrictions related to being uninsured.

Q. My car is 10 years old, has nearly 200,000 miles on it. But I know it’s not worth more than $1,500. Can I drop my insurance?

A. Auto liability is a mandatory coverage in most states, so you must keep that insurance in place. However, comprehensive and collision—which cover physical damage to your car—are optional. A good rule is: If your car is worth less than 10 times the amount you pay for comprehensive and collision coverage, consider dropping them. Research the current book value of your car using the N.A.D.A. Official Used Car Guide. Keep in mind, some lien holders may require you to carry physical damage coverage.

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