The single biggest question on a used-car policy is whether to keep full coverage. The right answer depends on the vehicle's actual cash value, your deductible, and how comfortable you are self-insuring a total loss.
The 10% rule
A common rule of thumb: if your annual full-coverage premium exceeds 10% of the vehicle's value, dropping collision and comprehensive may be reasonable. For a $4,000 car costing $600/year in physical damage premium, you're paying 15% — and the most you'd ever collect is the ACV minus deductible.
Title and salvage history
Salvage and rebuilt-title vehicles are harder to insure. Some carriers refuse them outright; others require a pre-bind inspection and exclude collision/comprehensive entirely.
Liability is non-negotiable
Even on a $1,500 car, you need adequate liability limits — the cost of the at-fault crash isn't capped by your car's value.
Frequently asked questions
Should I drop collision on an old car?
Often yes if the car is worth less than 10x your annual collision premium plus deductible.
Can I insure a salvage-title vehicle in Texas?
Yes, but options are limited and physical damage coverage may be unavailable.
This article is for general information only and is not legal or tax advice. For guidance specific to your situation, talk to a licensed Texas insurance agent. Ready to put it into practice? Get a free quote or request a policy review.