Comprehensive Coverage Calculator

Physical damage cover is capped by what the car is worth. As the vehicle depreciates, the maximum the insurer could ever pay falls, while the premium usually does not fall as fast. At some point you are paying a meaningful annual amount to protect an asset worth only a few thousand dollars.

This calculator finds that point. It compares the premium against the largest payout the coverage could produce - the vehicle value minus the deductible - and shows how many years of premium equal that payout.

Result

Verdict at these numbers

The premium exceeds the expected payout at the claim frequency entered

Maximum possible payout

$3,200

Years of premium equal to that payout: 6.2 years
Annual premium: $520
Premium as share of payout: 16.25%
Expected annual payout: $448
Net expected benefit: -$72
Vehicle value in a year: $3,696
Maximum payout in a year: $2,696

This is an estimate based on the values you entered. Actual premiums, coverage, eligibility and pricing vary by provider and by individual circumstances.

The most useful number here is the years-of-premium figure: if paying the premium for four or five years costs as much as the maximum the insurer would ever pay, the cover is close to self-funding.

Physical damage cover is normally required while a vehicle is financed or leased, regardless of what this arithmetic says.

How to use the comprehensive coverage calculator

Enter the current market value of the vehicle, not what you paid for it.
Enter the annual premium for the comprehensive and collision portion only, from your declarations page.
Enter the deductible that applies to those coverages.
Set how often you expect to claim and the annual depreciation rate, then read the verdict.

What people use this for

Deciding whether to keep full coverage on an older vehicle.
Planning the year in which physical damage cover will stop being worth it.
Comparing the cost of coverage against simply saving the premium.
Reviewing a policy after a loan on the vehicle is paid off.

Worked examples

Every figure below is produced by running this calculator against the example inputs, so the numbers always match the tool.

A ten-year-old car

A vehicle worth $4,200 with a $1,000 deductible, $520 a year for physical damage cover, one claim expected roughly every seven years.

Verdict at these numbers: The premium exceeds the expected payout at the claim frequency entered
Maximum possible payout: $3,200
Years of premium equal to that payout: 6.2 years

A three-year-old car

A vehicle worth $19,000 with a $500 deductible and the same $520 premium.

Verdict at these numbers: The cover is worth more than its premium at the claim frequency entered
Maximum possible payout: $18,500
Years of premium equal to that payout: 35.6 years

The ceiling on any physical damage claim

On a total loss the insurer pays the actual cash value of the vehicle, minus the deductible. That is the ceiling, regardless of what you paid, what you still owe, or what a replacement costs today.

So a $4,000 car with a $1,000 deductible has a maximum payout of $3,000. Paying $520 a year for that means roughly six years of premium equals the largest possible benefit - which is the point at which most people conclude the coverage has stopped making sense.

When you cannot drop it

A lender or lessor will require physical damage cover for as long as there is a loan on the vehicle, and that requirement overrides any arithmetic here. Dropping it can trigger force-placed insurance, which is considerably more expensive and protects the lender rather than you.

The same applies if you could not replace the vehicle out of savings. Coverage on a $4,000 car is poor value in expectation and still the right decision for someone who would otherwise be unable to get to work.

Methodology and assumptions

What this calculator does, and what it deliberately does not do.

Maximum payout is the vehicle value minus the deductible. Expected annual payout multiplies that by the claim frequency you entered.
Years of premium equal to payout divides the maximum payout by the annual premium for the coverage.
Depreciation is applied at the flat annual rate you entered; real depreciation is front-loaded and model specific.
All figures are estimates produced from the values you enter. This site has no rate feed and no carrier data, so it cannot quote or price a policy.
Nothing you type is transmitted or stored - the calculation runs entirely inside your browser.

This calculator provides an estimate based on the information you enter. Actual insurance premiums, coverage, eligibility and pricing vary by provider and individual circumstances.

This website is not an insurance company, an insurance agency or a licensed broker. It does not sell insurance, does not provide insurance quotes, and is not authorised to give advice about which policy you should buy.

No result produced here is an offer of insurance or a guarantee of coverage. Only a licensed insurer or agent, working from your verified details, can quote or bind a policy.

Frequently asked questions

What is the difference between comprehensive and collision?

Collision covers impact damage. Comprehensive covers almost everything else that can happen to a parked or moving vehicle: theft, fire, hail, flood, falling objects and animal strikes.

How do I find my car’s actual cash value?

Established valuation guides give a range for the make, model, year, mileage and condition. Insurers use their own valuation on a claim, which is why a total-loss settlement is sometimes disputed.

If I drop comprehensive, can I add it back later?

Usually yes, subject to underwriting and an inspection in some cases. It is not a permanent decision.

Does dropping coverage affect my premium immediately?

It normally takes effect from the endorsement date, with the unused portion of the premium credited pro rata.

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