Sometimes it makes sense to reduce the coverage you carry for physical damage on an older vehicle.
When the loan is paid off and you own your vehicle outright, you get to choose whether you want to insure your car against physical damage. Comprehensive generally covers damage that occurs while you are not driving and Collision generally covers damage that occurs when you are behind the wheel. So, when is it wise to remove that coverage?
My advice is that when the cost of the coverage exceeds 10% of the value of your vehicle it becomes more cost effective for you to remove the coverage and put the savings away to help pay for a future replacement. In other words, if you are paying $500 per year for Comp/Collision on a vehicle that is only worth $2500, take off the coverage and bank the savings.
A caveat to this rule is that if you only have one vehicle and replacing it or doing without it would be a hardship for you, then you might still want to pay for the coverage.
My overall insurance strategies are that you should self-insure as much as you can and only transfer the risk to insurance companies when it makes sense. Insure the big things, not the little things.
(This advice is general in nature and may not fit your specific situation. Please call my agency or speak to your agent to see what makes sense for you.)