The 10% Rule: Should You Drop Your Comprehensive & Collision Insurance?

The 10% Rule: Should You Drop Your Comprehensive & Collision Insurance?

One of the most frequently asked questions about automobile insurance for those who own an older vehicle is when is it no longer economically wise to carry comprehensive collision coverage on that vehicle. For most, the 10% rule is a reasonable guideline. Here is how it works.

The 10% Rule Defined

The 10% rule is based on the premise that you should consider dropping your collision and comprehensive automobile insurance coverage when the cost of such coverage meets or exceeds 10% of the book value of the car. It sums that the MOST you can get to repair your vehicle is its book value so paying 10% or more for that protection provides diminishing returns.

Let’s take, for example, your vehicle has a book value of $5,000. Ten percent of this value would be $500. If the premium for the comprehensive collision coverage portion of your policy exceeds $500 annually, it is probably no longer a good value to maintain that coverage. You may be better off reducing coverage to just liability. Of course, it will depend on your tolerance for risks. You my also lose some other valuable protection by eliminating comprehensive collision coverage. It is best to ask your independent insurance agent how such a reduction will impact your coverage.

Why Minimum Coverage May Not Always Be Best

Understandably, most don’t want to pay any more than they have to for automobile insurance. This, like most things in life however, doesn’t necessarily mean you should get the cheapest or least expensive plan available. Just because states have minimum standards does not mean that may be sufficient for you. You may benefit considerably through the acquisition of under or uninsured motorist insurance, a rent-a-car provision when experiencing a loss of use or even higher minimums of overall coverage. This is particularly true for those who have more financial resources at risk.

One of the best solutions when you have questions about your automobile insurance coverage is to get an auto insurance review. If you prefer, your review can also include a quote from multiple insurance companies who compete for your business. This allows you to base your choice on value, not just price. Contact one of our independent insurance agents and get started today! Get the protection you need without overpaying for your automobile insurance.


Do you have questions about your insurance? Find an insurance agent near you with our Agent Finder

Buzz Your
Insurance Agent

Search for a local agent with our agent finder map.

Agent Finder

Search All Blogs

Generic filters
Exact matches only
Search in title
Search in content
Search in excerpt

Buzz Your
Insurance Agent

Search for a local agent with our agent finder map.

Agent Finder

Want to learn more about our blog writer?

Read more about KayLynn's background.

Click Here

Search All Blogs

Generic filters
Exact matches only
Search in title
Search in content
Search in excerpt

One Name Wonders: The Alluring Allure of the Single-Name Star

Beyond Beyoncé: How Celebrities Achieve Mononym Magic

Family First, But Business Savvy: The Dos and Don’ts of Hiring Family

Blood, Sweat, and Sales: A Guide to Hiring Family for Your Small Business

Life Insurance: Unraveling the Mystery (No Shady Business Here)!

Life Insurance FAQs: Unveiling the Mysteries and Myths (Without the Gimmicks!)

Gone But Not Forgotten: The Era of the Full-Service Station

A Blast from the Past: Remembering the Golden Age of Full-Service Gas Stations

Selling Your House? Navigate the Maze with These 4 Options

Unveiling the Maze of Selling Your Home: Realtors, Discount Brokers, FSBO, and Cash Buyers

Beyond the Buzzer: Fun & Funky Facts About Your Favorite Game Shows!

From Heavy Wheels to Sneaky Buzzer Tricks: Unveiling the Secrets of Game Show Production

Home Office Hustle: When Working Remote Turns into Running a Business

Working from Home or Running a Business? How to Tell (and How to Insure Yourself)

Life Insurance Claims: Demystifying the Process (So You Can Get What You’re Owed)

Life Insurance Claims: A Simple Guide to Getting What You Deserve

Selling Your Used Car? Polish It Up, Snap It Up, and Sell It Smart!

Conquering the Used Car Sale: A Guide to Getting Top Dollar

Curb Appeal on a Budget: From Bland Yard to Backyard Bliss

Landscaping Magic: Unveiling the Budget-Friendly Path to a Stunning Home Exterior