Do you need full coverage car insurance? It all depends on the level of protection you're looking for and the value of your car. Adding comprehensive and collision coverage is more expensive than minimum liability coverage, but it provides much more protection. If you are leasing or financing your car, your lender will likely require you to have comprehensive and collision coverage. If you don't have a loan or lease, it's up to you to decide if the extra cost of full coverage is worth the peace of mind it provides.
Generally, you can consider canceling full-coverage insurance if the cost is more than 10% of the value of your car. Full-coverage car insurance usually includes collision insurance, comprehensive insurance, and at least the minimum coverage required by state law. Different states have different car insurance requirements, but almost all of them require drivers to have liability coverage. Liability insurance is mandatory in most states, while full coverage is only required if you lease or finance a car. On average, auto liability insurance costs 51% less per year than full-coverage insurance. If you're risk-averse or don't have the savings to easily pay for repairs to your car, full coverage may be the best option.
However, you can buy higher liability limits than those required by your state and still have an “exclusive liability” policy, as long as you don't add coverage for damage to your vehicle. For more information on full-coverage auto insurance and to compare the cheapest full-coverage auto insurance companies, see WalletHub's guide.
