Gang,
How do you guys decide to keep/drop?
Comprehensive/Collision auto insurance
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Re: Comprehensive/Collision auto insurance
An extreme view would be that if you can't afford to get in an accident with your car and buy a new one, you couldn't afford it in the first place and shouldn't be insuring your way into a car you can't afford.
That's a little harsh, though. I personally stick with really high deductibles, and don't insure unless it's over $10,000 in FMV.
Liability on the other hand, I would buy more than the required amount in your state. Medical bills can add up insanely fast, and $50k (my state's minimum) is a pretty pitiful amount, and you're on the hook if you get sued beyond that amount. I have an umbrella policy over my home/vehicles as well.
That's a little harsh, though. I personally stick with really high deductibles, and don't insure unless it's over $10,000 in FMV.
Liability on the other hand, I would buy more than the required amount in your state. Medical bills can add up insanely fast, and $50k (my state's minimum) is a pretty pitiful amount, and you're on the hook if you get sued beyond that amount. I have an umbrella policy over my home/vehicles as well.
"Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds."
- Thomas Paine
- Thomas Paine
Re: Comprehensive/Collision auto insurance
I think the best bet is to keep full coverage (unless the car is worth very little) and just increase deductibles. Increasing deductibles can save a lot of money and still keep you from being car-less if the vehicle were to be totaled in an accident.
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Re: Comprehensive/Collision auto insurance
Thanks guys! Very helpful.
Two more quick ones:
1) What do you guys consider "high-deductible"? I'm at $1000 now.
2) Do you guys consider "Uninsured Motorist" to be important?
Two more quick ones:
1) What do you guys consider "high-deductible"? I'm at $1000 now.
2) Do you guys consider "Uninsured Motorist" to be important?
Last edited by amdda01 on Mon Feb 28, 2011 1:45 pm, edited 1 time in total.
Re: Comprehensive/Collision auto insurance
I think mine's $1,500 or $2,000. $1,000 is pretty good, though.
"Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds."
- Thomas Paine
- Thomas Paine
Re: Comprehensive/Collision auto insurance
There's another consideration you should make when buying auto insurance - not just the value of the car you drive: Do you have enough coverage to pay for someone else's car and medical?
Hypothetical scenario: Your $1000 beater just plowed into someone's $100K Mercedes, totaling it and sending them to the hospital for $200K worth of bills. Your $50K insurance pays in full and the person comes after you for the remaining $250K, wins in court, and gets your house plus any accounts that are not protected outside of your 401k. In a no fault insurance state, it might have not even been your fault at all, they hit you, but because "the other guy's insurance pays" you get sued in court.
So, I think it's reasonable now to have $100K/$300K insurance on almost any car you drive. If you have a good driving record this shouldn't cost too much.
A high deductible is fine; you surely have enough in temporary savings to cover it.
Another thing to strongly consider is temporary car rental replacement coverage - it's only a few bucks more and gets you a rental car if your vehicle is in the body shop getting repaired from an accident. I once got hit by someone and didn't have a car for 6 weeks. Lesson learned - I do not want to be making a car payment and have to pay for a rental as well.
Hypothetical scenario: Your $1000 beater just plowed into someone's $100K Mercedes, totaling it and sending them to the hospital for $200K worth of bills. Your $50K insurance pays in full and the person comes after you for the remaining $250K, wins in court, and gets your house plus any accounts that are not protected outside of your 401k. In a no fault insurance state, it might have not even been your fault at all, they hit you, but because "the other guy's insurance pays" you get sued in court.
So, I think it's reasonable now to have $100K/$300K insurance on almost any car you drive. If you have a good driving record this shouldn't cost too much.
A high deductible is fine; you surely have enough in temporary savings to cover it.
Another thing to strongly consider is temporary car rental replacement coverage - it's only a few bucks more and gets you a rental car if your vehicle is in the body shop getting repaired from an accident. I once got hit by someone and didn't have a car for 6 weeks. Lesson learned - I do not want to be making a car payment and have to pay for a rental as well.
"I came here for financial advice, but I've ended up with a bunch of shave soaps and apparently am about to start eating sardines. Not that I'm complaining, of course." -ZedThou
Re: Comprehensive/Collision auto insurance
Thanks Storm - Great insight, and easy to understand.