insurance question - Collision & Comprehensive

"It mentions declaration of value does not apply where the actual cash value of a vehicle and its equipment is less than $10,000."

My car only worth $6000, does it mean i don't need to buy this item? Cos i've already bought the 3rd party liability.

And anyone can give example of what does the fomula means? thx.
(dv / acv * loss) - deductible = claim

dv = declared value
acv = actual cash value