The first reason would be you have a vehicle that is financed, it would be a requirement of the finance company that you maintain that level of insurance on the vehicle in order to ensure that they would be paid on the financing if the vehicle was totaled, if damaged the vehicle would be repaired to maintain the value.
Beyond that you would need to ask yourself a question: Can I afford to have this vehicle damaged or totaled beyond it being usable?
This question means if the vehicle was damaged to the point you could no longer use it, could you afford to pay for repairs or could you afford to loose the vehicle all together and survive without it (or afford to buy a new vehicle.
If the answer to this is “Yes” then you likely don’t need full coverage. If you can take the financial loss of the vehicle being totaled (assuming your fault) and not be impacted by it then the insurance coverage is not doing you a lot of good. Perhaps this is an older second car you happen to keep around, maybe it is just not worth that much if it were to get totaled, maybe you are simply rich enough that even if it is worth $20K you can just go buy a new one and eat the loss?
If the answer is “no” then you probably should have full coverage insurance. The point of it is to financially protect you. Even if your car is paid off it is still worth money. If the car is worth $20K would you not want a check for $20K if it gets totaled? That is what the insurance is providing you.