Financial advisors generally recommend considering dropping collision and comprehensive (full) coverage when the annual cost of those insurance premiums equals or exceeds 10 percent of your car's total current market value. For example, if an older vehicle is worth only 2,000 dollars and your annual full coverage premium costs 800 dollars, paying for collision insurance makes little financial sense. However, before dropping coverage, you must ensure you have sufficient personal savings to replace or repair the vehicle entirely out of pocket if an accident occurs.
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