1 in 4 Drivers Cut Auto Coverage in 2025, CCC Report Finds

CCC Report Reveals a Growing Coverage Gap

Nearly 1 in 4 Americans downgraded or dropped insurance coverage during 2025, according to CCC Intelligent Solutions' 2026 Crash Course report released March 31. Car insurance topped the list of coverage types canceled or reduced, with 15% of consumers cutting their auto policies, compared to 8% for health insurance and 5% for homeowners coverage.

Eight percent of auto policyholders dropped full coverage entirely, switching to liability-only policies. Kyle Krumlauf, CCC's director of industry analytics, attributed the shift partly to an aging vehicle fleet: 12 million fewer vehicles six years old or newer are on U.S. roads compared to 2020, and the average vehicle age reached 12.8 years in 2025.

The financial pressure behind these decisions is measurable. Bureau of Labor Statistics data cited in the report show auto insurance costs have climbed 55.8% over the past eight years. Insurify's separate 2025 survey found that 43% of Americans said car insurance costs negatively affected their financial goals that year.

What Liability Only Does Not Cover

Drivers who drop full coverage save an average of $88/month ($1,056/year), according to MoneyGeek's 2026 analysis. Liability-only policies cost roughly $67/month nationally, compared to $136/month for full coverage with 50/100/50 limits and $500 deductibles.

That $1,056 annual savings disappears the moment a hailstorm, deer strike, theft, or at-fault accident damages your vehicle. Liability insurance pays only for damage you cause to other people and their property. It covers nothing on your own car.

• Collision coverage pays to repair your car after an at-fault accident, with the average repair bill running $4,500 to $5,000 in 2025 according to CCC data
• Comprehensive handles theft, vandalism, hail, floods, animal strikes, and falling objects (these claims fell 16.1% in 2025 as more drivers dropped the coverage)
• Gap insurance, available only with full coverage, covers the difference between your car's depreciated value and what you still owe on a loan
• Rental reimbursement and roadside assistance, two add-ons that require a full-coverage base policy at most carriers, also vanish when you downgrade

For drivers who still owe money on a car loan, dropping full coverage violates the lender's financing agreement. The lender can force-place its own collision and comprehensive policy, which typically costs 2 to 3 times more than a voluntary policy, according to the National Association of Insurance Commissioners.

Rising Deductibles and Claim Avoidance

Drivers who kept full coverage are still pulling back. CCC's data show that 26% of auto insurance customers now carry deductibles of $1,000 or more, an increase of 3.5 percentage points in the past year and 6 points over two years. The share of $500 deductibles, long the industry standard, dropped 7 percentage points in the same period.

A separate J.D. Power 2025 U.S. Auto Claims Satisfaction Study found that 7% of policyholders avoided filing a claim entirely because they feared a rate increase. Timothy Davis, president of SCA Claims, called the pattern a direct reflection of household economics.

"It speaks to the affordability crisis that consumers in America are dealing with right now," Davis said. "When you look at the reduction of claims frequency with light claims, that's because people are taking higher deductibles."

Repairable claims declined 9.7% across all coverages in 2025, according to CCC. Lower-severity claims are increasingly absorbed out of pocket, which concentrates the remaining filed claims around higher-severity, higher-cost outcomes.

Uninsured Driver Risk Hits Record Levels

The Insurance Research Council's most recent study found that the combined uninsured and underinsured population on U.S. roads reached 33.4% in 2023, a 10% increase since 2017. The national uninsured motorist rate alone stood at 15.4%, up from 11.6% in 2019.

Year	Uninsured Rate	Change from Prior Year
2019	11.6%	Baseline
2020	14.3%	+2.7 pp
2021	14.6%	+0.3 pp
2022	15.2%	+0.6 pp
2023	15.4%	+0.2 pp

Source: Insurance Research Council, "Uninsured and Underinsured Motorists: 2017-2023," published 2025. Rate reflects estimated percentage of uninsured motorists among all drivers nationally.

Mississippi leads the nation at 28.2% uninsured, while Maine has the lowest rate at 5.7%. Eight states now have uninsured rates above 20%, according to IRC data. Check your state's numbers on our car insurance by state page.

Insurify's April 2025 survey reinforced the trend: 53% of Americans said they had considered cutting back on car insurance, and 60% of consumers shopping for quotes between January and April 2025 were searching specifically for liability-only policies.

When Dropping Full Coverage Makes Financial Sense

Dropping collision and comprehensive is not always reckless. For vehicles worth less than $4,000, the math often favors liability only. CCC's own data show the average repair cost reached $4,500 to $5,000 in 2025, which means a total loss is almost guaranteed for low-value vehicles in any significant collision.

Vehicle Value	Annual Full Coverage Premium (est.)	Break-Even Point	Recommendation
Under $4,000	$1,056/year extra	Less than 4 years	Consider liability only
$4,000 to $10,000	$1,056/year extra	4 to 9 years	Evaluate your savings cushion
$10,000 to $25,000	$1,056/year extra	10 to 24 years	Keep full coverage
Over $25,000 or financed	$1,056/year extra	24+ years	Full coverage required (lender mandate)

Break-even calculation: vehicle value divided by annual cost difference between full coverage and liability only ($1,056/year based on MoneyGeek 2026 national averages with 50/100/50 limits and $500 deductibles). Does not account for deductible payments or rate variations by state, age, or driving record.

For a deeper breakdown of when the numbers favor dropping collision, read our guide on when to drop collision and comprehensive coverage.

What You Should Do Now

The Bigger Picture: Insurers Profit While Consumers Struggle

The coverage gap is widening at the same time insurer profitability has recovered. CCC's report shows the personal auto combined ratio improved to 94.4% in 2025, a 17.8-point improvement from 2022. The property/casualty industry overall hit a 96.1% combined ratio, meaning insurers collected $3.90 in profit for every $100 in premiums.

Rate cuts have followed in some states. Auto insurance premiums dropped 6% nationally in 2025, according to Insurify. Projections for 2026 suggest a modest 1% increase to an average of $2,158/year nationally.

That 6% decline barely dents the cumulative 55.8% increase over the past eight years. Fitch Ratings data cited in the CCC report show that 6.74% of subprime auto borrowers were at least 60 days past due on their loans in December 2025, a new record. Auto repossessions are expected to breach 3 million in 2026 for the first time since the 2009 financial crisis.

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