By on April 15, 2015

car insurance. Shutterstock user Song_about_summer

N.C. writes:

Sajeev,

We have 5 cars and 4 drivers. My wife and I drive the three oldest vehicles: 2003 LS430, 2005 Z4, and 2000 Frontier. My question is regarding collision insurance on the Lexus and the BMW. I currently carry full coverage on both and am considering dropping collision coverage to save money.

 

KBB and Edmunds show a range of values for the Lexus of between $5800 to $6200, (trade-in value that is, which is what the insurance company would want to pay if a claim was made) and the BMW is between $8100 and $6600. Both vehicles are mechanically sound and used for daily drivers. My youngest child will be a freshman in college in the fall and I would like for both of these vehicles to last for 4 more years before we consider replacing them. When does it make financial sense to drop collision coverage?

Sajeev answers:

I hate these questions, they are in the eye of the beholder.  Do you love these cars more than any replacement? Do you have big monthly expenses you have to worry about? Student loans, child support, tax spikes, etc? 

If you don’t care for the cars, can afford to take a total loss from an uninsured motorist and value more cash in your wallet every month; by all means, switch to basic coverage.

I like full coverage. But you don’t have 15+ year-old cars with rare options (that matter to fanbois) expensive-ish modifications (headers, fancy torque converters, acres of dynamat) making them irreplaceable.  You save a ton of money over basic coverage when something terrible happens (i.e. the claim’s payout) or by getting that terrible thing fixed (with or without a rebuilt title, depending on your state’s law).

Full coverage isn’t much more than basic to me, but you wanna know what really sold me?

10615957_10152343563823269_4882044344050485582_n

One morning I walked out to this scene: reeeeeeeal lucky that branch only scratched my trunk and busted my tail light. The paint buffed okay, a decent used light was $35 shipped from eBay that same morning.

The money I saved this time ’round went to $45 of Harbor Freight’s finest cutting tools: the saw is actually great for limited-use suburbanites! No matter, they made short work of the branch and the affair was pretty damn fun, actually.

 

But I won’t tempt fate again. I know when to drop full coverage insurance, and I don’t anticipate that need. Heck, I might switch to stated value just because I am such a Lincoln-Mercury fanboi.

[Lead image: Shutterstock user Song_about_summer]

 Send your queries to [email protected]com. Spare no details and ask for a speedy resolution if you’re in a hurry…but be realistic, and use your make/model specific forums instead of TTAC for more timely advice.

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177 Comments on “Piston Slap: When to Drop Full Coverage Insurance?...”


  • avatar
    JimC2

    Hey, don’t make fun of that intake. it’s easily 10% bolt-on horsepower. Just ask the owner.

  • avatar
    Hummer

    Really depends on the vehicle, like Sajeev said, if you find it irreplaceable whether it is or isn’t, do the full coverage. My beater never had anything more than basic, being out 3-4k wasn’t a big deal in the big picture. OTOH, I know if my H3T receives a good amount of damage to the irreplaceable bed, there’s a good chance it’s totalled, I actually don’t have it insured but you can bet it would have the best if I did put it back on.
    Reminds me when of a time when I was younger, my father removed the full coverage from his Truck >$10k in value, without really saying anything to anyone, later on my mother noticed and added it back on, just a few weeks later that truck was totaled. You can imagine how that went.

    • 0 avatar
      highdesertcat

      I agree! It depends on the density of traffic where you live and how much you value your vehicle whether to carry Full Coverage Insurance, or not.

      I have not carried Full Coverage Insurance on any of my vehicles, new or used, since the last time I financed one in 1988 (my Silverado). GMAC required full coverage insurance, comprehensive, collision and max liability with a $250 deductible back then.

      If I have clean-title without a lien holder on my vehicle, even if brand new, I cover the vehicle for the minimum required by the Great State of New Mexico, through USAA.

      That save TONS of money!

      • 0 avatar
        mnm4ever

        @hdc – 2 points:

        1. IIRC you are an older guy with a pretty healthy financial situation. You can likely afford to absorb any repair costs or liability costs that crop up from carrying the bare minimum insurance. Not everyone can do that.

        2. Do you REALLY save a ton of money? I mean, you have to carry something, its legally required. The highest cost by far is the basic liability, which they screw you on because they know its required by law. And for me, the difference between the lowest 10/20/10 coverage and my 100/300/100 is about $30/mo. Comp and Collision on each would be around $20/mo/car if I carried the highest deductibles. So what do you save… $1k a year? $2k tops??

        Just doesn’t seem worth it, especially for an older, well off driver, in a state with a lot of uninsured motorists, to take the risk for such a piddling amount. I have even looked into umbrella policies, and all of the ones I have found do not kick in until after $100-300k, some require you to have that with your car insurance before they will underwrite the policy.

        • 0 avatar
          wsn

          Starting from my first car, I have only bought new cars and I have never had any insurance above the legal minimum.

          I saved about $2000 per year and it counts.

          • 0 avatar
            mnm4ever

            @wsn – Wait until you get sued. In Florida we have a lot of insurance fraud “accidents”, and they will clean you out real quick.

        • 0 avatar
          highdesertcat

          mnm4ever, it’s not a piddling amount. My personal insurance coverage is not easy to figure out for Full Coverage because I get so many discounts for having ALL my insurances with one provider (USAA).

          I get billed every six month. The Grand Cherokee, Highlander and now the 1989 Camry are on one policy and cost ~$225 total for six month coverage.

          The Tundra is ~$85 every six months.

          But the amount goes up every six month in small increments. You get the idea.

          • 0 avatar
            tuffjuff

            HDC either has extremely low coverage or is completely full of it. Based on prior experience, I’m prone to go with the latter.

          • 0 avatar
            highdesertcat

            tuffjuff, I don’t know what your malfunction is but I don’t dispense advise to others. Really only worry about me and mine and don’t give a rat’s @ss about any others.

            I enjoy the community that is ttac. At least I used to enjoy the community that is ttac during the days of Robert Farago.

            But with people like you constantly berating other readers and commenters, ttac has become cheap and tawdry. Maybe that’s why so many of the old ‘gang’ have dropped it from their “must-reads.”

            I’ve been following your comments for a long time, and always thought you were an alright dude.

            Another disappointment.

          • 0 avatar
            SatelliteView

            wait till he tells you 91 octane makes his Grand Cherokee have more power!:)

            But the way, HDC, whoever told you that not giving an advise is an aspiring virtue? Also, congratulations on being an egoist. We already know how that ends: when they “come for you” there will be none to speak up, because you kept quiet when they “came for them

          • 0 avatar
            mnm4ever

            @hdc – So that is exactly what I am saying. If you can insure 3 cars for the lowest basic liability only policy for $225/6mo, then how much are you saving compared to getting insurance that would actually cover you for something meaningful?

            I checked… if I had basic liability only on my cars, I would pay around $300/6mo. Increasing liability from 10/20/10 to 100/300/100 costs an extra $160 or so. Adding comp/coll with $1k deductibles for each car adds another $160/car. So for 3 cars, the difference between carrying the minimum state required coverage and covering everything for a decent amount costs me around $100/mo extra. Since your basic liability coverage starts out lower than mine, I sincerely doubt you would pay more than $100/mo to increase your liability and cover all 3 vehicles on your policy with comp and collision. To me, thats a piddling amount. And I know from earlier comment threads that you have a WAY better financial situation than I do.

            You mention that you live in a state where a lot of illegal residents drive with no insurance. So you are not only trusting your own driving skill, you are counting on that fact that one of them doesn’t hit you. You also act like you drive junk cars… really?? A Grand Cherokee is $40k, so is a Tundra and a Highlander is at least $30k. (Why do you even have a 25 yr old Camry anyways?!?!). And having the minimum required liability might be legal, but how can you think that is smart? If anyone who drives your car ever even remotely appears to have been the cause of an accident, you are opening yourself up to a major lawsuit. Even if you win, you lose, because those lawyers will see you, with your fancy cars and wealthy family business, and see dollar signs.

            My daughter was in an accident when she was 17, in traffic, the guy stopped short in front of her with no brake lights and she hit him. Cop didn’t even ticket her, since there were no brake lights, and our insurance company did not fault her either for the same reason. Our car was totalled, his old van needed a $200 bumper. 2 weeks later we got a letter, he was suing us as the owners of the car. USAA handled the entire thing, they were super nice. The guy was running a total scam, he lied about everything. In the end, he STILL got the entire $100k limit of our policy. According to our USAA lawyer, even though they knew it was a scam, its cheaper to pay it than to fight it. Maybe you have a family attorney on retainer so you don’t worry about this kind of thing. But since then I have been extremely cautious about my insurance coverage, that is why I am shopping for umbrella policies and why I want my kids off my policy!

        • 0 avatar
          MBella

          “Do you REALLY save a ton of money? I mean, you have to carry something, its legally required. The highest cost by far is the basic liability, which they screw you on because they know its required by law. And for me, the difference between the lowest 10/20/10 coverage and my 100/300/100 is about $30/mo. Comp and Collision on each would be around $20/mo/car if I carried the highest deductibles. So what do you save… $1k a year? $2k tops??”

          When I got insurance for my 2000 E320 Wagon, I found out the price difference between basic liability and full coverage with $500 deductibles was $27 additional per month. I wasn’t planning on running full coverage, but for a bit over $300 per year it seems worth it. The medical liability seems to be the expensive part of insurance. The rest is small in comparison.

          • 0 avatar
            highdesertcat

            MBella, I know your comment was aimed at mnm4ever and not me but if I owned a Mercedes-Benz, BMW or any other world-class car, and lived in a more densely populated environment, I would, no doubt, carry the max insurance.

            As it is, I own a Tundra, Grand Cherokee, Highlander and 1989 Camry, all of them which can be easily replaced on my budget.

            The Sequoia is a company car. We get to drive it but don’t pay for the gas, insurance and upkeep.

            If I could afford an Exotic or Rolls, Bentley, yes, I would carry full coverage, because, surely, someone would always be wanting to steal it.

            No such worries with the standard fare I can afford to drive.

      • 0 avatar
        bball40dtw

        HDC is rollin the dice in NM. What if your Sequoia gets stolen? Or do you have comp insurance?

        • 0 avatar
          highdesertcat

          bbal, the Sequoia’s primary owner is the business, with secondary owner my wife. The business pays for the insurance on the Sequoia through the Fidelity and Guaranty provider.

          My Tundra lists me as the primary owner, and my wife as secondary, with rights of survivorship.

          On both the Tundra and the Sequoia we have the minimum insurance required by law in New Mexico, although paid by separate insurers.

          We also have the minimum insurance required by law on the Grand Cherokee, Highlander and 1989 Camry, but the Grand Cherokee is in the possession of my 23-yo grand daughter and the Highlander is in the possession of my 17-yo grand daughter in El Paso, TX. They’re all insured under my name through my insurer, but only for Liability, not comprehensive, or glass, or tow or whatever.

          So, if one of our vehicles is determined to be the cause of an accident by the police, we’re covered for liability as mandated by state law, but our vehicle will not be repaired by our insurance.

          If an accident is the other person’s fault, then our vehicles get repaired or replaced by the other person’s insurer, if they have one. Many illegal aliens do not have ANY insurance coverage although mandated by law.

          That’s why in NM the insurers offer Uninsured Motorist insurance coverage, where I would pay for the other person’s insurance and coverage in addition to my own.

          • 0 avatar
            tuffjuff

            Yeah, you have literally the lowest coverage available, and the people driving your car every day aren’t even technically insured to drive your vehicles. Thanks for verifying that it’s never a good idea to take any advice, you ever have to offer.

            Here’s hoping your “horrible” (your words) late model Jeep Grand Cherokee doesn’t get into an accident, what with the driver being uninsured and all.

          • 0 avatar
            highdesertcat

            In my state anyone I give permission to drive my vehicle is covered to the same extend that I am covered.

            But I realize that things vary from state to state. NM, AZ, CO, TX and NV all have about the same insurance laws. But CA is where the scheize hits the fan. It’s costly to be insured there, even for Liability Only, and even as an older person. That’s why my grandson had to pay for his new Accord in cash, so his insurance at age 25 would not kill him.

            What a lot of people do if taking their vehicle on a long trip is to call their insurance agent, get maximum coverage, pay the extra money, then cancel it when they get back, and get a refund. Happens quite a bit. My Traveling Elks brethren do that all the time to save a litle dough.

            I only did that once with the Highlander, in 2008 when it was new and we drove it to Huntsville, AL, then West Palm Beach, FL, and then home. I got every coverage imaginable, including towing, on it. I have never done it since on any of my vehicles.

          • 0 avatar
            bball40dtw

            Ahahaha. You have multiple vehicles that are in your name, driven by other people, and not garaged at your house. And….and, you have no collision insurance. You are worse than the illegal immigrants who can’t afford coverage. You literally put your family at risk every day by letting them drive a vehicle with low 3rd party liability coverage. You have the opportunity to protect your family but you choose not to. If your daughter or granddaughter hits someone and they sustain a severe injury, they are screwed. Also, NM is a comparative negligence state. You are responsible for the percentage fault you are to the other driver. Dollars rack up fast.

          • 0 avatar
            highdesertcat

            bbal, I checked all this out before hand, and I have all the coverage I need. I have an excellent relationship with my USAA insurance agent. They cover ALL my insurance needs.

            Liability Only in NM includes coverage for when one of my cars damages someone else’s car, and it also includes medical for those injured by us.

            But it hasn’t happened yet. Traffic is light here. And when we go on a long trip, like in 2008 with the then-new Highlander, I upped the coverage to the max for when we were on the trip, then canceled it after we got back home.

            My USAA insurance agent told me how to go about it, and it was great! Don’t worry, be happy.

            BTW, I had no garage in the desert and I have no garage now at my house in town. Just a drive-way with the garage converted into living space, like a Home Theatre.

          • 0 avatar
            bball40dtw

            The minimum property damange coverage in NM is $10K. You either don’t have minimum coverage or you better hope none of your cars are in an at fault accident with a car that costs over $10K.

            Also, minimum bodily injury coverages are $25K/$50K. If someone breaks a femur in an accident that one of your vehicles is driven by the person that is at fault, you might be past that $25K BI limit per person.

            Based on your statements, I don’t think you have “minimum” coverages. You just don’t carry comp/collision.

          • 0 avatar
            DC Bruce

            I think we’re losing sight of the purpose of liability insurance here. The purpose of liability insurance is so we don’t have to pay for the mess we make; the insurance company does. However, with a low limit policy, the insurance company will just offer the policy limits to the injured party, and then your assets will be on the hook for the deficiency. $10,000 property damage liability is ridiculous. We all know that just about any P-O-S vehicle is worth $10,000. And, if its a nasty accident with high medicals and high property damages, that’s worth suing you over. While the insurance company does have to defend you in a lawsuit, if they offer to settle at the policy limits and the plaintiff doesn’t agree to it, then you pick up the lawyer’s fee from that point forward.

  • avatar

    I’ve always kept full coverage with a $1000 deductible on my old cars, until the value of those cars dropped below the deductible amount.

    • 0 avatar
      sproc

      This. Our oldest car is still probably worth about $5k. Maintaining a $1000 collision deductible on it is pretty cheap. Given its age and cost of repair, I’m betting on the fact that even moderate damage will probably result in it being totaled, in which case I’d much rather cash out and have the insurance company handle the disposal instead of having to both eat the loss and junk the car myself.

  • avatar
    mtunofun

    You have to ask yourself, “if my car is totaled, how much money am I willing to give up?” As for me, my car is probably only worth 6-7k, but I that is money I don’t have lying around, so I would still keep my full coverage.

  • avatar
    TrailerTrash

    OK…a little off topic. perhaps. But it is part of this discussion.

    “can afford to take a total loss from an uninsured motorist ”

    OK. This disturbs me. It makes me insanely angry and gets my fires blazing.

    It is like the ad for an insurance company running on television these days. You know it. Starts out how you just got your new car and suddenly it gets side swiped…
    It ends with the question…The Real Question Is Why Do You Have This Insurance Company?

    No…the question is why doesn’t the guilty party’s insurance company pay for the damage?
    What is really going on here is similar to the ever running healthcare battle.
    In the eighties, when congress demanded any and all hospitals take care of anybody who enters with or without insurance.
    Since that moment we have been experiencing the never ending explosion of health insurance cost.

    Here we have it in the auto world. Since when is anybody allowed to EVER drive a vehicle WITHOUT coverage?
    You wanna know why? Then just spend a fun day inside a city traffic court and watch. You will see guilty party after guilty party stroll in front of the judge, get scolded for AGAIN, perhaps the 5th offense, not having insurance, get a fee, but never have to pay it…and likely drive off in another car not covered by insurance.
    Every day…all day long. I know.
    Where is the penalty? A wrist slap and then YOUR insurance covers THEIR expense.

    Point is…IF you love your car, YOU need to keep your full coverage because others don’t have any coverage.

    • 0 avatar
      Patrick M

      Wait, so someone with no insurance shouldn’t be treated by a hospital?

      • 0 avatar
        28-Cars-Later

        Ideally yes, otherwise the costs become essentially socialized which is what happens now. One of the issues which plagues us now is the socialized losses can only grow to a certain amount before tipping over the ship as it were which is an amount I worry we are approaching.

    • 0 avatar
      28-Cars-Later

      There is some kind of order of precedence when doing hospital billing. I’m reaching here but they always started with car insurance (if applicable for an accident etc), then homeowners (if applicable for a fire etc), next Medicare/Medicaid if they can bill, and finally private party health insurance who was always trying to get out of paying for anything.

  • avatar
    TurboX

    Insurance is to protect from catastrophic losses, the types that an individual cannot afford to bear. Insurance companies are profit seeking entities and do make a lot of money from that business.

    With that in mind I only carry insurance for the losses I could not afford to pay out of pocket and for everything else I self insure (keep the profits that would go to insurance companies). For cars I usually drop full coverage when the replacement value drops below $10K. Of course this varies from person to person depending on financial conditions and risk aversity.

    • 0 avatar
      seth1065

      turbo x ,
      where do you live that you can drop ins and self ins, as for the question of the day I have been hit twice in two years by uninsured drivers so full coverage stays on all my cars but man is it pricy when you have a teenage driver. If the OP is paying collage for the child it would look like a money saver to drop the full coverage and save a few bucks but would they have the 5,000 to replace a car if totaled by a uninsured driver?

      • 0 avatar
        Lorenzo

        He didn’t say he drops ALL insurance, he just reduces coverage and pays out of pocket for the small stuff. That’s an alternative to a $1,000 deductible, but full coverage, even with a big deductible, allows you to rent a car without the overpriced insurance they offer, since your policy usually covers rentals.

        • 0 avatar
          TheyBeRollin

          Your credit card, depending on the issuer and grade, probably provides insurance as well. Rental cars are insured like 3 times for most people that opt for the rental company’s coverage – by their card, by their personal, and by the inflated rental company plan…

          I’m with TurboX. Once the value drops enough that the car is readily replaced without pain, I drop them to liability. I haven’t had full coverage on my cars since 2001, since none have been worth more than a replacement value I could readily eat if I had to.

      • 0 avatar
        TurboX

        I meant self insurance for collision only. I still need to carry liability and I am not crazy enough to drop that even if I could (around here there are many low-lifers who will fake injuries and take you to court with crazy demands).

        Assuming you were not at fault your accidents would be covered by the other driver’s insurance and you can always have uninsured motorist coverage (a must in my state with many illegal immigrants).

    • 0 avatar
      baggins

      exactly, Turbo X

      A good working assumption is that the expected value of an insurance premium is about 1/2 what you pay.

      This doesnt mean its a rip off. I carry pretty big life insurance policy that will preserve my family’s situation if I pass. I hope they make a lot of money on me. The loss of my income stream would be devastating to my family. So its worth the 2K a year. Giving an insurance company 150 a year so I could get 4K back on my beater van – no way.

      Carrying collision or comp on 4K car only makes sense if you cant afford to replace it. It does make sense for some people, but Being poor can be pretty expensive.

  • avatar
    ezeolla

    I always heard that insurance will pay you retail value of your car in the case of it being totaled, not trade in, because that is the amount it will cost you to replace it. Is that not the case?

    And I am in this boat as well (3 cars, 2 drivers). I keep full coverage on my ’05 Wrangler because it is dirt cheap (~$40 per month) and it is worth >$10k. My ’06 G6 on the other hand just gets comprehensive (only $10 a month more over just liability) but no collision since it is worth <$5k. The G6 somehow is the still the most expensive to insure out of all 3 (the other is a '12 Liberty with full coverage)

    • 0 avatar
      bball40dtw

      Where I’ve worked, total loss vehicles are paid out at retail value. People still don’t think that’s enough.

      Overheard everyday in claims offices nationwide:

      “No sir. Just because you have a loan on your 2011 Dodge Avenger for $18,000 does not mean I can pay you $18,000 for it.”

      • 0 avatar
        CoreyDL

        The Avenger is an excellent car, worth at least $30,000 even in used condition. It’s superb at idling at gas stations while the owner buys a big soda and some Marlboro Lights. It also has many surfaces on which you may affix venti-ports, gills, bullet holes, and faux chrome trim. It’s also the perfect size for going through the Burger King drive-thru twice per week.

        • 0 avatar
          bball40dtw

          Until the driver, and this is a real claim here, clips a curb, rolls it over, hits a fire hydrant, knocks over a fence in front of a tire store, and damages three parked cars. Oh, and they didn’t have collision coverage….

          • 0 avatar
            CoreyDL

            Lol!

            Wow, drunk? I hope everyone else was covered.

          • 0 avatar
            bball40dtw

            Nope. Just a terrible driver. One car accident. Just lost control of her car in an area where the speed limit is 45 MPH. Wasn’t even speeding.

          • 0 avatar
            Lorenzo

            I hope he had more than the minimum collision coverage. My uncle always said, assume you might crash into a Ferrari and insure accordingly. My uncle was in insurance.

          • 0 avatar
            bball40dtw

            Lorenzo-

            Michigan insurance is different. If you smoke a Ferrari, all the Ferrari owner can get from you is $1000. It’s up to him to have collision insurance. If the Ferrari is parked, and you have state minimum coverage, your Property Damage (we call it PPI) coverage goes up to $1 million.

      • 0 avatar
        ezeolla

        That’s what I thought, which I like because I bought my Jeep under blue book value 6 years ago, and then used car prices went up. If I were to total it now I would probably get at least the amount I paid for it. INVESTMENT!

        And that is what gap insurance is for! But I guess someone who is taking out a close to 100% value loan on an Avenger isn’t going to get EXTRA insurance on it

        • 0 avatar
          bball40dtw

          A lot of the time they don’t even have Comp or Collision. I can’t tell you how many late model vehicles I couldn’t do anything about because they had no collision coverage.

      • 0 avatar
        snabster

        So, at what point can you more closely look at retail value.

        I mean, I get the blue book. mine (97 saab 900se) is around 3000 or so.

        But I can say with some certainity I’ve haven’t seen a working version for sale in the past year. There was one ebay for a while but he kept dropping it. Plenty of covertibles, no 4 doors.

        • 0 avatar
          bball40dtw

          You can contest whatever the insurance company says. That doesn’t mean you’ll win. A good claims rep will give you the most money they can and search out comparables if needed (or have you find comparables). The biggest issue is people always find what cars are listed for, not what they are being sold for. With my 2011 Avenger example, if Bob’s Autos, Bail Bonds, and Gentleman’s Club is selling a comparable Avenger for $19,500, I wouldn’t use that as a comparable.

          • 0 avatar
            zamoti

            Or in the case of my Miata, you can get a horrible claims rep with the lowest-rent insurance company that exists. They low-balled the claim, changed rep in the middle, the company was purchased by another company during this time, got a new rep, the new company that purchased the first sold it back off and I got to work with yet another person who offered me LESS than the first person. When they finally pieced together all of the docs that I’d sent them including photos of my injuries (Camry made a left turn in front of me, t-boned her) they finally relented and offered a reasonable settlement. It only took seven months. My insurance refused to let me file a claim through them and then do the subrogation on the back end. Hint, a little green fellow advertises for them and I no longer have a policy with them. Yes, I had liability only and was at the mercy of the at-fault party’s insurance (I don’t do that anymore).
            As Joshua once said, “The only way to win is not to play.”

          • 0 avatar
            bball40dtw

            Yeah. You can’t pick your claims adjuster. The better companies usually pay their adjusters more and give them less claims. An adjuster for the General or LA Insurance (or other daytime TV sinsurance company) is getting 10-12 claims a day, wasn’t trained, is getting paid below market rate, doesn’t care, and has a backlog of 80+ claims. If you have insurance from a company like that, You. Are. Screwed.

          • 0 avatar
            TheyBeRollin

            zamoti: This is why you never, ever, carry cut-rate insurance (Ge*co and their ilk). Out of 4 accidents I’ve been involved in (all the fault of the other party – one while riding a bicycle, one when slid into in a parking lot, one rear-end, and one pulling out in a blinding rainstorm), every one of the other drivers was insured with Ge*co. It seems the worst are concentrated among their ranks by a huge margin. After the third I found out that calling my insurance company and letting them deal with the lizard saved me enormous headaches and they bent over backward for me. The only people they fear are adjustors from other insurance companies, it seems.

    • 0 avatar
      r129

      The insurance companies do pay retail value. In my experience, they compile a list of comparable vehicles (same trim level, body style, engine, transmission, etc.) currently for sale within something like 100 miles, and average them to arrive at your value. I believe they have some sort of formula to adjust up or down for mileage and condition. When you drive an uncommon vehicle, this amount can vary wildly, and is, like anything else, up for negotiation.

      For instance, I know someone whose 2008 Saturn Astra 3-door manual was totaled a couple of years ago. Hit by a drunk driver while parked. There were very few comparable vehicles, and the replacement value seemed low. He was told that if he could find other comparable vehicles for sale at higher prices, they would take them into consideration. So, after some exhaustive scouring of the internet, he found a few more at a higher value, and they increased the payout by over $1,000.

      He replaced that Astra with a second almost-identical Astra, which was again totaled within a couple of months. Arriving at a value for the second Astra was much easier because of the first Astra. He then traveled 250 miles to find Astra #3, which is still going strong.

    • 0 avatar
      danio3834

      “I always heard that insurance will pay you retail value of your car in the case of it being totaled, not trade in, because that is the amount it will cost you to replace it. Is that not the case?”

      Usually, yes. That number can be all over the map depending on the car though. A late model midsize sedan will be pretty easy to pin down. Or, you could hit the jackpot like a friend of mine who bought a ’95 Impala SS for $1200 then received a payout of $10,500 8 months later when someone pulled out of a parking lot and t-boned him.

  • avatar
    Land Ark

    Hooray! An insurance question. That’s where I’m a Viking.
    Kidding.

    I used to work for a major car insurance company as a full service claims rep. Meaning I was the person you talked to on the phone and the person who looked at your car.

    It’s been a few years since I worked there and I’ve probably forgotten a lot of stuff, however there are some things that will always stick with me.

    Sajeev (or maybe Sanjeev interjected with this), you know that your car isn’t worth more money simply because some fanbois want it. The insurance company will base the value of your car on what it is worth in the open market. Your Fox and Panther cars may be in demand on the forums for each, but book value is not affected by that.

    Now, when should you get rid of full coverage? My theory is after the value of the car is low enough that you feel comfortable that you could replace it without financial hardship. Because of the people I dealt with and seeing their experiences, I have full coverage on all 6 of my cars. I take collision off the two that sit in the winter but all of them always have comprehensive. Generally comp is cheap to carry since damage covered by it happens so much less frequently than collision.

    I have only had 1 car in the last 20 years without collision (never had a car without comp) and it was a car I bought well below book value and paid with cash. I was willing to take the risk with it since it wasn’t my only mode of transportation.

    Some other advice:
    Get as much insurance coverage as you can comfortably afford.
    Don’t skimp on liability and injury coverage. I have very high limits on my policy. Having the minimum will cause financial ruin if you are responsible for a lot of damage (the average new car costs $32,000 and the average state minimum coverage for property damage is around $25k) or injuries.
    If you only have one car, get the rental coverage, it only costs a couple bucks.
    Don’t have deductibles so high that it prevents you from ever fixing your car if you damage it.
    Don’t forget that if you get in an accident you do not get paid 100% for depreciable items (like tires and batteries) if they get damaged. You have to pay the difference between their depreciated value and actual cost.

    I could go on and on. But I won’t this time.

    • 0 avatar
      bball40dtw

      California’s PD minimum is $5K. Hahaha. Horrible.

    • 0 avatar
      DenverMike

      Why not agree with your insurance co what you’ll want in dollars if your Hot Rod ’84 Fox LTD is totaled? If I you want $22,000 and the premiums reflect that, why not?

      • 0 avatar
        bball40dtw

        Because they aren’t going to pay you more than it’s worth. Unless you have riders for custom parts.

        Just because you think your Fox body is worth $22K, doesn’t mean the insurance company cares or agrees. Plus, that leads to insurance fraud. People would be getting $50K policies on Corollas and crashing them if you could do that.

        • 0 avatar
          87 Morgan

          If you have a car that you spent considerable sums on, but is not worth the money in the opinion of the insurance co, you need to shop your insurance.
          I have an Anpac Chrome policy in my 57. Stated value coverage for what their appraiser came to my house and appraised the car for.

          You can though, buy a stated value policy up to 25k on just about any car through them. The premiums will reflect this of course, but it could be worth it if you have a rare car that you deem irreplaceable.

          I keep full comp and collision in all four of my rigs. We only have two drivers, the insurance is relatively cheap in my opinion. The primary reason I keep the full coverage in the beater is because I lack the garage space to get them all indoors and this time of year in CO is hail season and from what I have seen it does not take much to golf ball out a Honda. Plus, even though it is a MT coupe, I am thinking it may have a target on it for theft. I hope not, but one never knows.

      • 0 avatar
        JimC2

        “Why not agree with your insurance co what you’ll want in dollars if your Hot Rod ’84 Fox LTD is totaled?”

        Exactly. Might need to shop around to get an agreed-upon policy, but this is not uncommon with car collectors.

        • 0 avatar
          bball40dtw

          Those are more specific policies and not every insurance company is willing to do them. You may have to show what the true value is by auctions or recent sales. Fox Body Mustangs aren’t exactly valuable.

      • 0 avatar
        Land Ark

        Agreed policies are a different animal. I have an agreed policy on the Land Ark and I don’t get to pick my coverage. They require collision and comprehensive. I don’t know a lot about agreed value insurance other than what I have. My advice should only be taken when applied to an everyday car.

    • 0 avatar
      baggins

      Land Ark

      The more insurance you can afford, the less you need it for cars.

      I really dont think the depreciated vs replacement value of battery or tires should be relevant to the decision of very many people.

      Agree on the liability issue.

      • 0 avatar
        Land Ark

        I wasn’t saying to buy insurance based on the depreciated value of some parts, I was simply pointing it out so it doesn’t surprise people when they file a claim, a non-sequitur for sure. Just listing things I thought folks would find helpful/don’t think about in general.

  • avatar
    Quentin

    Full coverage is a negligible cost up over liability with my State Farm policy. I considered dropping it on the MINI, but for saving $150/yr, it doesn’t make sense to potentially lose a car worth $6k to $8k. Covering the amount of damage you can do with your car (property damage, medical, etc) is the expensive part of insurance. We did drop the MINI down to a weekend/low mileage vehicle which dropped a bit of money off the insurance. I just have to verify the odometer each year.

    I’d actually suggest getting rid of the superfluous car (cough Z4 cough) if you are fretting over saving a couple hundred bucks here and there. You get to drop all the insurance coverage on the Z4 plus pocket whatever equity you have in it.

  • avatar
    CoreyDL

    Weren’t those lights on the Mark LED, in the final version? I’d think that would make replacement more complicated and expensive.

  • avatar
    CoreyDL

    Also, I’ve always had just the comprehensive and required liability, on anything I drive. But that’s due to mileage largely, I don’t go very far.

    My insurance is $46/mo.

    • 0 avatar
      bball40dtw

      “My insurance is $46/mo.”

      That’s because you live in Ohio.

      • 0 avatar
        CoreyDL

        Don’t be mad because there is such low murder and theft here! I’m jelly you get to look at RenCen all the time.

        • 0 avatar
          bball40dtw

          Part of the higher insurance costs in Michigan can be attributed to the following:

          -In any collision you go back to your insurance, regardless of fault (the most you can collect from an at-fault driver is $1000)
          -No PD, we have something called PPI that is almost the same thing except the miminum (required) coverage is $1,000,000.
          -PIP, our version of MedPay has no cap. It’s an exposure that insurance companies can pay out for an injured person’s entire life.
          -Detroit

          • 0 avatar
            CoreyDL

            That’s an interesting (bad) way to do it, using your own insurance all the time.

            PIP sounds like some disastrous insurance product that they would sell for 2 years as DI, before realizing it’s not worth it.

            Kentucky is a no-fault state, so you’re always on your own insurance. You also pay a tax each year based on the book value of the car. Because of this, many people who live just inside Kentucky find a way to insure their car in Ohio (preferred) or Indiana (secondary choice).

          • 0 avatar
            bball40dtw

            PIP is fine. The cost is worth it. If I get T-boned by a drunk driver, and I have to do long term rehab in a nursing home like place, I know I’m covered. My wife works at an inpatient rehab facility and they have a few people recovering from car accidents. PIP also has to pay for modifications to your home if you have a disability as the result of a car accident.

            It costs us like $150 more a year then your version of MedPay.

      • 0 avatar
        28-Cars-Later

        I never wanted to live in Ohio until now.

        Wait, I still don’t want to live in Ohio.

        • 0 avatar
          bball40dtw

          Ohio is Florida of the Midwest.

          28-

          Have you been to any of the Tigers-Pirates games this week?

          • 0 avatar
            CoreyDL

            Miami is the Rio of the Southeast!

          • 0 avatar
            28-Cars-Later

            I was at the Pirates Opening Day incidentally. We’ve been tailgating and attending the game for six years but in the last two its gotten ridiculous. A gentleman in the lot next to us brought a 36 foot Budget truck and unloaded people and equipment from it for a *Pirates* tailgate. This is a Steelers/Packers level of professional tailgating, IMO.

          • 0 avatar
            CoreyDL

            I went to a Pirates-Reds game last week!

            Two and a half hour rain delay, so it started at 9:40 last Wednesday. Left before it was over, at 12:30 AM since it was a weeknight.

            What a long day. But we won!

          • 0 avatar
            bball40dtw

            Was opening day Monday in Pittsburgh? I was at opening day last Monday in Detroit.

            I told Derek that it seemed like the city of Windsor came out for Tigers opening day. I was in aparking lot with almost all Grand Caravan Canada Value Package Editions with Canadian plates. The retooling of Windsor Assembly was good for baseball I guess.

          • 0 avatar
            28-Cars-Later

            @Corey

            Staying out past 12 on a weeknight, you wild man you.

            @bball

            Correct, it was the Pirate’s opening day.

            You knew Major League Baseball was behind it. Didn’t Bart warn us about them?

          • 0 avatar
            CoreyDL

            It was for a work thing! Otherwise, I’m not much into sports though. But I couldn’t pass an opportunity to be in a suite for a baseball game. I just looked like a fool there because I was all dressed up.

          • 0 avatar
            bball40dtw

            That’s weird that opening day was against an American League team. At least it’s a team with players you’d want to see.

            “Do you want to know the terrifying truth, or do you want to see me sock a few dingers?”

          • 0 avatar
            28-Cars-Later

            Dingers!

            @Corey

            “I just looked like a fool there because I was all dressed up.”

            Nah, too easy.

    • 0 avatar
      ezeolla

      Somehow, my Jeep with full coverage is $40/mo and my G6 with just liability and comprehensive is $60/mo

    • 0 avatar
      Powerlurker

      My insurance is $58/mo and that’s with 250/500 liability and full coverage ($1000 deductible for collision and comprehensive) and I live in the Dallas/Fort Worth metroplex.

  • avatar
    duffman13

    I generally say to drop it at some threshold between $3 and $5k. Obviously YMMV and it also depends on your financial ability to replace the car if something were to happen, not to mention your need to have said functioning vehicle. If you have a fun car and a beater, I’d say insure the fun car, but let the beater just have liability.

    If you use it go get to work everyday and would be out of a job without the ability to procure a replacement vehicle in short order, full insurance on a $3k car is probably a good idea. If you can’t trust yourself to sock away the savings in a rainy day/emergency fund in case the worst happens, full coverage is also a good idea.

  • avatar
    michal1980

    The real question is how much are you paying to cover your potential loss?

    Is it an extra 200 bucks a year for 8000 dollars of coverage?

    or 800 bucks a year for 2000 dollars in coverage?

  • avatar
    Internet Commenter

    I’m considering switching providers and recall surveys indicating that The Hartford is highly respected. Has anyone had experience with them, and if so, how did was it?

    Alternatively, any other company you’d recommend? I’m with a cheap company right now, Geico.

    FWIW I haven’t had a ticket in over 13 years and the only claim I’ve ever filed was to fill in a chipped windshield. I also live in Ohio.

    • 0 avatar
      CoreyDL

      Both Geico and Progressive often to a bait/switch, where your first year premium is low, followed by jacked up premiums in every subsequent year. The Geico quote for me was higher than other “non-discount” insurers.

      I am with Allstate, as well as several of my family members. I have never personally had a claim, but their service has been good, and their website allows you to do pretty much everything -without- going to an agents office and hearing a sales pitch. That’s what I want. They give a good discount if you use them for both house/apt and car, so make sure you do that. There’s also a safe driver discount, and an auto-debit discount which is pretty considerable, if you pay 6 months at a time.

      My grandparents have had accidents (old people swiping things) and a fire in their garage (battery charger) and Allstate was responsive and took care of things without any hassle. Every single time.

      • 0 avatar
        Internet Commenter

        The bait/switch is basically what I’ve seen, a steady premium creep.

        Thanks for the info re Allstate. I’ll get a quote.

      • 0 avatar
        r129

        When I was in my 20s, I found that the “discount” insurers like Geico, Progressive and Esurance were always the cheapest. I also found that they would lure you in with a low rate to get you to switch, but would either increase your rate the following year, or never reduce it as you moved into a lower risk bracket. Therefore, I switched insurance companies every 1-2 years, with the price going down each time. I even switched back to the same company a couple of times.

        Then, as I hit my 30s, I found that the “non-discount” insurers actually had lower rates, especially when combined with homeowners insurance. I found a company that I really like, with a local office that provides excellent service and remembers my name. I don’t plan to switch anytime soon, but I’ll continue to check rates every few years.

        • 0 avatar
          bball40dtw

          Progressive is trying to be a non-Discount insurer now. They bought a home owners insurance company and have been expanding into more “prime” customers. I still don’t want the Flo tattle tale device in my car though.

          • 0 avatar
            r129

            Speaking of homeowner’s insurance, another thing to remember is that if you switch companies, they will probably send someone out to inspect your house. I know someone who switched, then received a letter saying that they were being dropped by the new company because of peeling paint and a damaged storm door.

          • 0 avatar
            bball40dtw

            Most homeowners insurance companies do inspections. Some renters insurance policies send an inspector out to see the apartment building. State Farm did when I lived in Detroit, but not Tucson or Livermore, CA.

          • 0 avatar
            CoreyDL

            Interesting, Allstate did not. They just asked questions during sign up, regarding asbestos, lead paint, type of water heater, etc.

          • 0 avatar
            bball40dtw

            Corey-

            I live in the Detroit area, albeit, in an extremely nice neighborhood, so I think AAA just wants to make sure I don’t live in a crackhouse.

        • 0 avatar
          Internet Commenter

          Haha, I signed with Progressive when I bought my first car at 22, then switched to Geico b/c Progressive raised their rates. I’ve just been complacent and paying Geico for the last x years despite the steady increases.

          I suspected this was their business model, lure people in with low rates then slowly raise the premium, and most people won’t make the effort to shop around and just pay.

          Thanks

          • 0 avatar
            CoreyDL

            For what it’s worth, my rates over the past three or so years have not changed more than $7-12 per year, and are actually lower than when I started because I had a ticket drop off. They don’t always go up, sometimes they fall a little with their adjustments as well.

      • 0 avatar
        Sketch

        Funny, my experience with Progressive was nearly the opposite. My initial cost was nearly half of what I was paying Allstate, who had been raising my rates slightly every year. With Progressive, they went down nearly every year.

        The moral of this comment: shop around. Prices vary greatly depending on area and your car(s) and driving record.

        • 0 avatar
          Toad

          My Progressive experience has also been good; over the last 3 years my rates have gone down even after replacing a 2005 Dodge with a 2014 Nissan. Motorhome, homeowners, and umbrella liability is also very reasonable.

          Geico did have a little annual payment creep for the 6 years we were with them; not so with Progressive so far.

          Interestingly, my (large) neighborhood got hit with a hailstorm a couple of years ago; all the roofs were replaced by insurance except the homes insured by State Farm and Erie. I asked one of my neighbors with State Farm why he has not switched carriers and he said he did not want to switch because had been with them of 10 years and their rates were good. Go figure.

      • 0 avatar
        Internet Commenter

        Interestingly, the quote from Allstate is within $1.50 of Geico when the discounts you mentioned are factored in.

        I’m a covered driver on my fiance’s State Farm policy so I have to speak to an agent to get a quote for my car, but I suspect it’ll be a similar situation.

        It doesn’t look like Geico will see any money from me next month.

        Thanks for your help everyone.

    • 0 avatar
      Land Ark

      You should shop insurance rates at least once a year. I do it every 6 months. Being loyal to one insurance company usually just leads to higher premiums with nothing to show for it.

      I dealt with The Hartford a few times. They didn’t really leave an impact on me. Seemed pretty good, their customers liked them.

      The best is State Farm, but they are not cheap.
      USAA is second best, but you need military ties to get them.

      Geico and Progressive definitely don’t make you feel special (I have had both, currently have Geico).

      If you have something like The General, I weep for you and the other driver if you ever need to use them.

      • 0 avatar
        Internet Commenter

        @LandArk – Thanks for sharing your experience with The Hartford. My fiance has State Farm now and her family has been happy with them. Steve Lehto (author/lawyer) on Jalopnik has made negative anecdotal references to State Farm, but I’d imagine every company has a few horror stories.

        I’ll get a quote from them too.

        I was going to make a joke at the expense of The General, but didn’t know if anyone else had seen those cartoon commercials. Embarrassing to watch.

    • 0 avatar
      highdesertcat

      Internet Commenter, who in your area is the best provider depends on where you live and what the density of the population and the number of claims processed.

      From personal experience, USAA is best if you can qualify to be a member.

      Friends have told me that Farmers Insurance is also outstanding IF you have ALL your insurance coverages with them (Life, House, Car, Boat, Motorcycle, ATV,etc etc etc)

      Others have told me that State Farm is the worst unless you live in IL.

  • avatar
    mnm4ever

    Insurance pays out retail value not trade in value. USAA is particularly good about actually researching what similar cars are selling for in your local area, and reviewing the condition of your car to account for even higher (or lower I suppose) value. If you keep your cars in top condition, you should get a top dollar payout if they get totalled.

    I love these questions and especially love the answers from those who drop comp and collision to “save a ton of money”. Comprehensive insurance is the cheapest thing on my policy, cheaper even than towing and labor, and I have a super low deductible ($150) too. No way I would ever drop it. Collision? Well on average I pay $18/mo per car for collision, less for the older cars, more for the newer ones. I have two college age kids driving too, so same as the OP. I have never seen it worth it to drop collision and save $16-17/mo but risk losing $6-8k if anything happens. Too many uninsured motorists running around, and I have never seen a point in the $1000 deductible either, it costs maybe a dollar or two more to have a $500 deductible. So you are going to save maybe $50/mo tops but have two fairly valuable cars that you drive the most often have no coverage? Is that worth it?

    • 0 avatar
      JCK

      I had a very different experience going to the $1000 deductible. It saved me a significant amount vs. the $500 deductible. It was enough, given any reasonable expected rate of accident, to save money over the long term.

      If you have enough cash to cover an unexpected $1000 expense, then it’s worth at least investigating.

      • 0 avatar
        Toad

        I have always heard that filing an insurance claim for under $1000 is a bad idea because it will raise your rates far more than the out of pocket costs you will incur. By this logic it makes more sense to keep a $1000 deductible and pocket the premium savings if you never plan to file a claim below that amount.

        Since I have not had an at fault accident in over 25 years I cannot verify if this is true or not.

      • 0 avatar
        mnm4ever

        Out of curiosity I just ran the numbers on my policy. Changing from $500 to $1000 deductible saves me $2.60 on one car, and $2.10 on the other car. Which works out to $56 per year. So if I never make a claim in 10 yrs or so I save money. Hardly worth it to me.

        As for making minor claims, just because you have a $500 deductible doesn’t mean you have to claim everything over $500 in damage. You are welcome to pay for things out of pocket if you choose, but if you get hit with a bad repair cost of say $3k or whatever, you only have to come up with $500.

  • avatar
    bumpy ii

    This one is simple enough: when you’re willing to pay for accident damage out of pocket, or give up on the car and part it out or sell it to a junkyard.

  • avatar
    PrincipalDan

    As Mehta says, how much do you love it?

    My 2004 F150 Heritage, now on liability only. It is over 100,000 miles and I love having a full size truck around but if something happens, I’ll get by.

    My wife is considering a newer vehicle but doesn’t want to “get rid” of her 2005 Vibe (sentimentality completely). When she gets something different I’ll encourage her to drop the Vibe down to liability. She may love it but carrying full coverage on a base Corolla wagon with over 100,000 miles seems silly.

    • 0 avatar
      bball40dtw

      I’m not familiar with NM insurance law, but if you were in Michigan, I’d tell you to get a higher broad form deductible on the Vibe ($1000-$2000). This way, if it’s not her fault, the insuance company waives her deductible. It’s better than no collision coverage and it’s typically way cheaper than a $500 deductible.

  • avatar
    DenverMike

    Dropping full coverage is gamble, and you’d be betting on yourself, just as the insurance companies do. I’ve never had full coverage an have to cringe at the thought of all the new cars and trucks I’ve owned and couldn’t have really replaced when newer, in case of a total loss. It’s not for everyone, but it’s paying off for me.

    I’m positive it’s made me a better driver/owner though, with a healthy dose of paranoia and always calculating risk, like avoiding driving in front of a heavier vehicles. Taking the long way around, instead of the quick maneuver.

    Every car and truck is out to crash me, and they have zero insurance. So I watch my back, front, everything. But I can’t ever pat myself on the back. I have to remind myself how much I $uck at driving.

    • 0 avatar
      sproc

      That’s a really odd personal incentive. It’s like never washing your hands but then trying not to touch anything to avoid getting sick. If you can afford to drive new vehicles, a few hundred dollars extra a year seems well worth it for the piece of mind, no matter how defensively you drive.

      • 0 avatar
        DenverMike

        Driving is a high risk sport, even with full coverage. I’m OCD about it, like I am with power tools, except with driving, you have no control over the next gal/guy. But I know guys that have lost a finger or an eye from power tools. But they never lose the 2nd eye or finger.

  • avatar
    grasscutter

    OP here. Thanks for the replies. To fill in a bit of detail: $1,000 deductable on the policy, the company is Cincinnati, dropping collision on the BMW and the Lexus would save about $400 annually so I will probably keep it in place as I want to keep them for 4 years. College age drivers are killing me, (about $2,000 per car) but I will keep full coverage in place for those two cars. I dropped collision on the truck several years ago because it is not driven much. Should I shop around this year? I have been with Cincinnati for 20 years.

    • 0 avatar
      CoreyDL

      Cincinnati Financial is relatively small where P&C is concerned (as well as other lines, really). You might consider checking with a larger company like a couple of the ones mentioned above. I bet you can save some money.

      Don’t fall into the “Oh I’ve always been with them” overpaying trap! Your insurance policies come from before the time of easy access to quotes and information online.

      Time to update.

    • 0 avatar
      mnm4ever

      I have found what I think is a workaround to the young driver insurance penalty. According to USAA, as long as my kids have their own policy on their own vehicle, they do not have to be listed as drivers on my policy. Regardless of their own vehicle, they can drive my cars legally and be covered in case of an accident. This works with any vehicle, not just cars. So my plan is to buy each of them a small scooter, in their name, and they will get their own policy on the scooters. From Progressive we can get insurance for $150 for the entire year with 100/300 liability coverage. Then I can take them off my policy, which saves me about $100/mo. Of course I have to buy the scooters, which will offset the savings for a while, but they don’t have to be nice ones, the cheapo chinese 50cc ones are all over the place for $500 or so.

      I haven’t tried this, but a family friend has with their daughter, and I have discussed it in detail with 2 agents at USAA, both of which assured me the plan was sound, and more importantly, completely legal. Before anyone freaks out about safety, we don’t plan on them riding the scooters anywhere outside our neighborhood, this is just to save money on insurance costs, they will continue to drive our cars for school/work/etc. I’ve been shopping for scooters, but the same plan works for small motorcycles as well. One daughter found a Ninja 250 she really likes but mom said no to a sportbike, way too tempting for her to want to ride it. I am thinking a small enduro would work too, they could use to go trail riding. Motorcycle insurance is incredibly cheap for the small bikes.

      • 0 avatar
        bball40dtw

        The only asterisk that I would include in that senario is this:

        If one of your kids were to get in an accident, USAA will make you add them to your policy or make them excluded drivers. They may notice, like State Farm did when we lived with my wife’s parents, that other people are living in the household. I got a letter from State Farm requesting that I add my sister in law to my auto policy or exclude her.

        • 0 avatar
          mnm4ever

          It is possible this will only work until the first accident (which I pray never happens of course) so you may be right. Except this was discussed with USAA agents, actually one of them suggested it, and USAA is clearly aware that they live in my house.

          Did your sister in law have her own vehicle? That seems to be the main point, if a driver lives in the house without their own policy, then they either have to be excluded or added to mine, but as long as they carry a policy on a vehicle, that is no longer a requirement.

          • 0 avatar
            bball40dtw

            My sister in law had a leased vehicle in her father’s name.

            I think State Farm was just making my life difficult.

          • 0 avatar
            mnm4ever

            Perhaps… USAA is a joy to work with, usually State Farm is too.

            But the car wasn’t in her name, which matters. But did she have an insurance policy on that vehicle in her name? Or was she on your father-in-law’s insurance policy as a named driver?

            That is the sticking point, every driver has to be on a policy for the liability insurance. A friend of mine with teenage twins has tried to skirt this by not putting his kids on his policy when they turned 16… a dont ask dont tell policy so to speak. He figures they probably won’t get in an accident, or if they do he will fix the cars for free for the other drivers (he owns a repair shop), he will say they stole his car, or he thought they were on his ex-wifes policy, whatever. From what I hear from my insurance agent buddy, that will work… once. Then they will drop him. The risk is worth it to him. Not to me, I want to be legal.

          • 0 avatar
            bball40dtw

            She was a named driver. She was 17 or 18 at the time. They still wanted me to exclude her.

            The situation you talked about where someone doesn’t add their 16 year old works. Not all insurance companies will drop you. The claims adjuster will send a note to underwriting to exclude them or add them to the policy.

  • avatar
    87 Morgan

    Full disclosure, I work for Allstate.

    I hate the nanny device that tracks my driving. Due to my driving err habits, I lost the 10% discount for having it. Wife did too. Fine with me, I am not a fan of big brother.

    We received notification just last week that Progressive will now use there tracking device to not only provide discounts, but raise your rates should you prove to be a poor driver, in their opinion.

    I like the Allstate coverage from the stand point that once you have it, a driving record is not run at renewal. So, if you get a ticket you don’t have the obligatory rate increase we all expect. Conversely, if you shopped and switched you would need to call them to rerate your insurance once your ticket/infraction time lapsed.

    • 0 avatar
      CoreyDL

      You work for Allstate but carry Progressive insurance? What gives?

      Employee discount!

      • 0 avatar
        28-Cars-Later

        Flo seduced him.

      • 0 avatar
        Land Ark

        Where I worked we were specifically instructed not to carry our company’s insurance.
        The reason is that if something happened, you don’t really want to have to go to court to battle with your insurance company who is also your employer.

        • 0 avatar
          CoreyDL

          Funny, it’s the exact opposite here. You’re encouraged to purchase as much of our insurance as you want, and we have a Home Office employee discount program.

          There’s also one agent down the street who writes most of the H.O. business, he’s around here all the time.

        • 0 avatar
          Toad

          That is probably an excellent idea; suing your employer is not a good plan for keeping your job, much less advancing in it.

      • 0 avatar
        87 Morgan

        No, I don’t have progressive insurance. We get industry related information/gossip emailed to us from the mothership.

        I did have a claim experience with them though last fall after one if their insureds caused a five car wreck and shoved a VW through my pop up camper.

  • avatar
    danio3834

    I don’t carry collision on my cars that are worth in the 6-8k or less range. If I hit something, I can repair it myself for less than the cost of the difference in premiums. But I’m all privileged with those skills and stuff. Even if I weren’t, I still wouldn’t bother with collision on them because I rarely hit things and when someone hits me, they or their insurance pays.

  • avatar
    Demetri

    Insurance companies don’t pay out more than they take in. If you can comfortably afford to replace it yourself, don’t insure it.

  • avatar
    TW5

    The time to forgo collision and comprehensive depends upon your personal finances, more than the value of the car. I’d hope that no one with 7 figures in liquid or near-liquid assets would ever have collision or comprehensive because they should be putting every penny towards liability. The risk of losing the car is insignificant compared to the cost of being sued for your stack. If you drive a Veyron, maybe it’s a different story.

    Personally, I have multiple vehicles and they are all used high-mileage. I don’t have collision on any of them, but I do carry theft. Not sure why. I guess the thought of having a casualty loss due to theft is unacceptable to me, but I can handle the thought of losing a vehicle, if I cause the crash.

    • 0 avatar
      baggins

      good points.

      You should ditch the theft coverage.

    • 0 avatar
      rpn453

      “I guess the thought of having a casualty loss due to theft is unacceptable to me, but I can handle the thought of losing a vehicle, if I cause the crash.”

      We don’t have the option of dropping collision coverage here in Saskatchewan, but I would probably come to the same conclusion at some point if I could. I think a person deserves to be entirely responsible for damage to their own vehicle if they crash it anyway. The anger at the loss of my car would pale in comparison to the anger at my incompetence, and I’d feel deserving of that financial loss. It would be beneficial in reinforcing the lesson I needed to learn.

      But having theft insurance would take a little of the edge off my murderous rage at someone stealing my property, and the fact that I live in a system where those people are allowed to exist. That bit of a calming influence would be well worth it if the situation arose.

  • avatar
    gtemnykh

    Another data point: I recently dropped collision on my 2012 Civic, but bought a high res dashcam for about $75 that runs constantly. The thought process is as follows: I’m betting on my own driving skills to never be at fault in an accident, and in the situation where the blame would be unfairly leveled at me in an accident, the dashcam will hopefully record evidence to prove my position. Saved about $300 annually. Crucial to this approach is also the fact that if in the unfortunate case that my car does get totaled and I’m at fault, I’m not in a position that I don’t have a vehicle or don’t have enough resources to acquire another vehicle of equal value/utility.

    • 0 avatar
      mnm4ever

      So you save $300 per year, $25/mo, or basically the cost of 2 or 3 lunches out, or 2 weeks of Starbucks. But you open yourself up to going to court to “prove” you are not at fault because you are such an amazing driver. And while waiting for your Perry Mason day, you have a wrecked 2012 Civic that even on a bad day is worth $12-14k that you have to pay out of pocket to get fixed.

      Dealing with insurance claims and car repairs is bad enough when you have insurance. I can’t imagine how it would be to deal with it on my own.

      • 0 avatar
        baggins

        He said he can afford to lose the 12K.

        And he could end up in court whether he has insurance or not, the camera is a good idea regardless of his insurance status.

    • 0 avatar
      bball40dtw

      gtemnykh, what state do you live in?

      • 0 avatar
        gtemnykh

        Indiana.

        Again, it all comes down to risk acceptance. I am risking paying for my own mistakes, and perhaps even for someone else’s mistake (camera mitigates the second scenario to a large degree). The car still has comprehensive and liability coverage. All the more incentive to drive defensively, something that’s already been ingrained in me from riding motorcycles.

        • 0 avatar
          bball40dtw

          You have less of a risk driving with no Collision in Indiana than many other states. As long as you are less than 50% at fault for an accident, the other insurance company or party pays.

          One word of caution, if your drive in Michigan, BE CAREFUL. Michigan rules apply. If someone else hits you and is 100% at fault, the max they owe you is $1000. The rest depends on your insurance coverage. Some companies are certified in Michigan and will give you $500 standard collision, some do not.

          If you hit them, your PD and Indiana tort laws apply.

    • 0 avatar
      danio3834

      Plus, dash cams are sweet and often capture hilarity.

  • avatar
    SunnyvaleCA

    I generally drop comprehensive and collision after the first 6 months. I figure that by then I’ve gotten used to the car and if I were going to crash it I would have done so by then. They don’t offer to reduce my rates after 6 months, but I believe my risk is substantially lower by that time.

    My current car is a bit different. For most people a Cayman S is a “garage queen.” For me it is my only means of transportation: runs to the dump, supermarket, Costco, etc. I can’t imagine the vandalism risk of occasionally parking a bright yellow Cayman S on the streets of San Francisco. So, I have kept the full coverage as an “investment”–not counting the sunk cost of 29 previous uneventful years of paying in, I think my current risk of vandalism exceeds the current (quite reasonable) payment.

    • 0 avatar
      baggins

      No offense, I find your first paragraph to be absurd. You get used to a car in week.

      THe risk of crashing is affected by driving habits, and where you drive and who else is driving there. That doesnt change after the first six months.

  • avatar
    Dave M.

    DON’T DO IT. When I “retired” my 2001 Trooper to vacation duty only, I was guesstimating based on 12 years & 220,000 miles of accident-free behavior. I dropped collision; I promptly hit a deer last summer.

    $4000 in repairs later (the car was running perfectly prior to that), I kick myself often. I misunderstood the agent on the insurance quote to keep collision on it….

    No that it’s road worthy again, I just use it 3-4 weeks a year. My insurance company asks me to just notify them during the time it’s in use. Very reasonable.

    I’m so stupid…

  • avatar
    Pch101

    If you can’t afford to write a check to replace or repair your car, then you should keep your coverage.

    And no, you should not bet on your fantastic-in-your-imagination driving skillz to justify dropping the coverage if you can’t cut this check. Do not bet on your awesomeness or the other guy’s policy to save you.

  • avatar
    rpn453

    So, uh, how much would you save?

    Oh, I now see you’ve answered that. I had only searched for the same username as on the OP.

    $400 to cover $13,000 worth of vehicles. Seems cheap enough at this point. Definitely worth it if that’s what it takes to cover damage from uninsured motorists as well.

  • avatar
    slow kills

    I personally drop it as soon as possible. That money is better kept in the rainy day fund, as I am not one for blowing money.
    With a paid-off car, I’ll easily take the risk of having to fork over bucks for major repair or total replacement over waiting for insurance to send some unspecified amount and raise the premiums to cover it.
    Assets beat perpetual paying. Assets build when you cut recurring expenses.

  • avatar
    WildcatMatt

    I worked for a big-name insurance company for 8 years on the phones. This is what I told my customers:

    The first thing to do is balance the “blue book” value of the car against what you’re paying for coverage and what your deductible is. Example:

    Car is worth $3000.
    Deductible is $500.
    6-mo premium for coverage is $250.

    $3000 – $500 = $2500 – what you’ll get from the insurance.
    $2500 / (2 x $250) = 5 years.

    In essence, this means that you will pay the replacement cost of the vehicle in insurance premium is 5 years. This is where each person has to find their comfort level based on budget. At 5 years it probably still makes sense to keep the coverage. Once that number dips below 4 it’s probably better to drop it and put that money in the bank as a down payment for a new car.

    As a sidecar, I tell people to consider whether they will actually use the coverage. If the vehicle is a beater pickup and you’re going to live with dents and scratches, why pay for the coverage?

    Your individual driving history is a factor, too. Keep in mind that collision coverage is only for repairing your car when YOU are at-fault in a loss, if you’re confident you’re not going to cause an accident, you’re less likely to need it.

    And keep in mind, in all states you can carry comprehensive and not collision, so you can still be covered for acts of nature. In fact, in many cases, the “right size” coverage is to drop the collision coverage and actually lower the comprehensive deductible. Many times you can go from $500 to $250 for as little as $10/year.

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