The 10% Insurance Rule

Actuarial Decision Model Stop Overinsuring Older Cars 10% • Max Annual Premium Ratio Millions of drivers pay full coverage on aging vehicles that insurers would total for pennies. Here is how the actuarial 10% rule works. AutoInsure.online • Coverage Strategy 1 / 10

Depreciation vs Flat Premiums

The Core Disconnect Value Drops, Rate Stays High -15%/yr • Car Value Depreciation Your cars actual cash value falls every year, but your collision premium barely drops. Over time, you pay more than the vehicle is worth. AutoInsure.online • Coverage Strategy 2 / 10

How to Calculate the 10% Rule

The Formula Simple Math Test Step 1 • Check Actual Cash Value Look up your cars fair market value on Kelley Blue Book (KBB). Subtract your deductible to find your maximum insurance payout. AutoInsure.online • Coverage Strategy 3 / 10

Compare Against Comp & Collision

Step 2 • The Threshold Is Premium > 10% of Value? 10% Cap • Maximum Sensible Cost If your annual comp and collision premiums exceed 10% of your maximum payout, drop them. You are mathematically losing money. AutoInsure.online • Coverage Strategy 4 / 10

2014 Sedan Worth $4,000

Real Example • Drop Case $500 Deductible + $600 Premium $3,500 • Max Insurance Payout With a $500 deductible, max payout is $3,500. Paying $600/yr for comp and collision is 17% of total value—a clear financial loss. AutoInsure.online • Coverage Strategy 5 / 10

Build Your Own Sinking Fund

The Self-Insurance Hack Save $50/mo Into High-Yield $600/yr • Liquid Cash Saved Drop physical coverage and divert that $50/mo into a savings account. Within 3 years, you have $1,800 cash without paying insurer markups. AutoInsure.online • Coverage Strategy 6 / 10

When You MUST Keep Full Coverage

Important Exception Active Auto Loans & Leases Mandatory • Lender Contract Requirement If you have an active auto loan, your lienholder contractually requires full coverage with a maximum $1,000 deductible until paid off. AutoInsure.online • Coverage Strategy 7 / 10

Never Skimp on Liability

Liability Priority Protect Assets, Not Metal 250/500/100 • Recommended Limits Dropping collision is smart, but never reduce bodily injury liability. State minimum limits leave your personal wages exposed to lawsuits. AutoInsure.online • Coverage Strategy 8 / 10

How to Execute Today

3-Step Execution 3 Quick Actions 15 Mins • Policy Adjustment Time 1. Check KBB value. 2. If premium exceeds 10%, call carrier to drop collision. 3. Reinvest savings into emergency cash reserves. AutoInsure.online • Coverage Strategy 9 / 10

Test Your Vehicle in 30 Secs

Interactive Calculator 10 / 10 Free Actuarial Tool $0 Cost • Instant Calculation Input your vehicle year, model, and current premiums into our interactive calculator to see your exact 10% rule breakeven point. Run the 10% Rule Coverage Calculator