Factors Favoring *Not* Having Full Coverage:
* Low Vehicle Value: The primary reason to drop full coverage (which includes collision and comprehensive) is that the car's value is likely low. If the cost to repair or replace the car exceeds its actual cash value (ACV), it's financially unwise to pay for full coverage. You'll likely be better off just carrying liability insurance.
* High Premiums: Full coverage premiums can be significant, especially for older vehicles. The cost of the insurance might outweigh the benefit of coverage.
* Financial Situation: If you're on a tight budget, the extra expense of full coverage might strain your finances. Liability insurance is legally required in most places and is a much more affordable option.
Factors Favoring Having Full Coverage:
* Loan or Lease: If you still owe money on the car, the lender will almost certainly require full coverage. This protects their investment.
* High Emotional Value: Even if the car's monetary value is low, you might place a high sentimental value on it. Full coverage provides peace of mind in case of damage or theft.
* Potential for Accidents: If you live in an area with a high accident rate or your driving record isn't perfect, the risk of an accident that requires repairs might outweigh the cost of full coverage.
Recommendation:
Get quotes for both liability-only and full coverage from several insurers. Compare the premiums to the actual cash value of your 16-year-old car. If the cost of full coverage significantly exceeds the car's value, it's likely not worth it. If you're unsure, talk to an insurance agent; they can help you weigh the risks and benefits based on your specific situation.
