The “Freedom” of a Lower Bill vs. The Reality of Frisco Roads

There is a specific feeling of freedom when you pay off a car note. You own it. The bank is gone. The next logical thought is: “Why am I still paying $200 a month to insure a 2016 Honda Accord?”

It’s a fair question. In the insurance industry, we make money when you buy more coverage. But as a steward of your finances, I’m telling you: insuring a depreciating asset like it’s gold is bad math.

However, Frisco isn’t a normal driving environment. We live in a city where average new car prices exceed $50,000, and luxury SUVs are the standard commuter vehicle. If you strip your policy down to the “state minimum” bones to save $40 a month, you aren’t saving money. You are playing Russian Roulette with your net worth.

This guide will show you exactly how to calculate when to switch to liability-only, and how to do it without exposing your family to financial ruin.

1. What “Liability Only” Actually Means

To use First Principles thinking: Insurance is risk transfer. When you buy “Full Coverage” (a marketing term, not a legal one), you are transferring two types of risk:

1. First-Party Risk: Damage to your car (Collision/Comprehensive).
2. Third-Party Risk: Damage you cause to others (Liability).

When you switch to Liability Only, you are taking back the First-Party Risk. If you back into a pole, you pay for it. If a tree falls on your hood, you buy a new hood. You are “self-insuring” your vehicle.

However, you are still transferring the Third-Party Risk. This is mandatory by law. The problem is that most people transfer too little of this risk.

2. The Frisco Reality: The $25k Trap

Texas law (Transportation Code § 601.072) requires minimum liability limits of 30/60/25. This is often called “State Minimum Liability.”

• $30,000 for injuries per person.
• $60,000 total injuries per accident.
• $25,000 for property damage.

The Texas Department of Insurance sets these minimums, but they do not account for the economic reality of Frisco, Texas.

The “Tesla Problem”

Look around you at the intersection of Lebanon and the Tollway. You see Teslas, Range Rovers, Rivians, and Ford F-250 King Ranches. The average price of a new vehicle in the U.S. is nearly $48,000, but in affluent suburbs like ours, the average car on the road is often worth $60,000 to $100,000+.

According to 2025 repair data, the average collision repair for an EV is running 20% higher than gas vehicles due to sensors and battery packs. A moderate rear-end collision involving a luxury EV can easily exceed $30,000 in repairs.

Read more on this in our guide: The Dirty Truth About State Minimums.

3. The “10% Rule” (When to Switch)

So, when should you drop Collision and Comprehensive? We use a simple First Principles rule of thumb:

If the annual cost of Comp/Collision coverage is more than 10% of the vehicle’s cash value, drop it.

Note: This only applies if you own the car outright. If you have a loan, the bank requires full coverage.

4. Don’t Delete UM/UIM

This is the most common mistake we see. A client calls and says, “Give me liability only, I want the cheapest legal policy.”

Many agents will strip the policy down to the bare bones, removing Uninsured Motorist (UM/UIM) coverage. This is dangerous.

Roughly 1 in 7 Texas drivers (approx. 14.5%) are uninsured. If you drop Collision coverage (which covers your car if you hit a wall) AND you drop UM/UIM (which covers your car if an uninsured driver hits you), you have zero protection for your vehicle.

The Smart Strategy: Drop Collision/Comprehensive to save money, but KEEP Uninsured Motorist Property Damage (UMPD). It is significantly cheaper than Collision coverage and protects you from the 14% of drivers who aren’t following the law. See our breakdown on UM/UIM Coverage here.

5. The Agent’s Office® Advantage

We don’t use cookie-cutter algorithms. We look at your specific rate factors and your net worth.

If you have a teenage driver in an old car, we might structure a policy with “Liability Only” on the car, but with high 100/300/100 liability limits to protect your family’s assets. We help you find the sweet spot where you aren’t over-insuring a hunk of metal, but you aren’t under-insuring your bank account.