The Core Insight Most Sites Miss
Full-coverage premiums do not drop much with car age. The liability portion (which covers your risk, not the car's value) stays roughly flat throughout the car's life. The physical damage portion (collision + comprehensive) drops only 5-8% per year. Meanwhile, car values decline 15-20% in year 1 and 10-15% annually after that.
The result: the premium-to-value ratio relentlessly increases over time. A car that was a "keep full coverage" decision at purchase will typically cross the 10% threshold between years 3 and 8, depending on the vehicle and your premium level. The table below shows the full curve for a mid-size car purchased new at $30,000.
15-Year Premium and Value Table (Mid-Size Sedan)
| Car Age | Approx Value | Full Coverage/yr | Liability/yr | Savings/yr | 10% Ratio | Verdict |
|---|---|---|---|---|---|---|
| Yr 0 | $30,000 | $1,900 | $960 | $940 | 6.3% | keep |
| Yr 1 | $24,000 | $1,820 | $930 | $890 | 7.6% | keep |
| Yr 2 | $19,500 | $1,745 | $900 | $845 | 8.9% | borderline |
| Yr 3 | $16,200 | $1,675 | $875 | $800 | 10.3% | drop |
| Yr 4 | $13,800 | $1,615 | $855 | $760 | 11.7% | drop |
| Yr 5 | $11,900 | $1,560 | $835 | $725 | 13.1% | drop |
| Yr 6 | $10,300 | $1,510 | $815 | $695 | 14.7% | drop |
| Yr 7 | $9,000 | $1,465 | $800 | $665 | 16.3% | drop |
| Yr 8 | $7,900 | $1,425 | $785 | $640 | 18% | drop |
| Yr 9 | $7,000 | $1,390 | $770 | $620 | 19.9% | drop |
| Yr 10 | $6,200 | $1,355 | $755 | $600 | 21.9% | drop |
| Yr 12 | $4,800 | $1,295 | $730 | $565 | 27% | drop |
| Yr 15 | $3,400 | $1,225 | $705 | $520 | 36% | drop |
Mid-size sedan ($30k new). Illustrative model combining typical full-coverage and liability premium levels with KBB/NADA-style depreciation curves. Individual results vary by carrier, ZIP, driver record, and vehicle.
Worked Examples: Three Vehicles
2015 Honda Civic (2026: 11 years old)
| Value | $5,500-$7,000 |
| Full coverage | $1,250-$1,500/yr |
| Liability only | $650-$800/yr |
| 10% ratio | 18-27% |
Classic 10% rule fire. Premium exceeds threshold by wide margin. Drop collision and comprehensive, keep 100/300/100 liability + UM/UIM.
2018 Toyota RAV4 (2026: 8 years old)
| Value | $16,000-$20,000 |
| Full coverage | $1,450-$1,700/yr |
| Liability only | $750-$900/yr |
| 10% ratio | 7-10% |
Right at the borderline. Worth checking annually. If you can get quotes below 10% of car value, keep it. Otherwise, consider dropping.
2020 Ford F-150 (2026: 6 years old)
| Value | $28,000-$34,000 |
| Full coverage | $1,700-$2,100/yr |
| Liability only | $850-$1,050/yr |
| 10% ratio | 5-7% |
Well below threshold. Full coverage is mathematically justified. F-150s also carry higher theft risk, which elevates comprehensive EV.
The Gotcha: Liability-Only Is Not 50% of Full Coverage Cost
Many drivers assume switching to liability-only cuts their bill in half. In reality, the physical damage portion (collision + comprehensive) is typically 40-50% of total premium. The liability portion stays because you still need it: it covers your legal exposure, not your car.
Example: $1,500/yr full coverage policy breaks down as approximately $750-900/yr liability, $400-500/yr collision, $150-200/yr comprehensive. Moving to liability-only saves the $550-700/yr physical damage portion, roughly 37-47% of the total bill.
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