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At What Point Do You Drop Collision, Etc On Older Car And Just Have Liability?
May 23, 2017, 09:38 PM
PASigAt What Point Do You Drop Collision, Etc On Older Car And Just Have Liability?
Situation: my daily driver car. 2007 Honda Civic with 176,000 miles on it. In decent but not pristine condition, it does a good job of getting me from point A to point B. Paid off and the plan we just decided is for me to keep it for another 2 years or so until my wife's Mazda is paid off, then I get a new or newer car so we only ever have 1 car payment. Based on how much I drive, it will be clocking in at around 205,000 in 2 years.
I was looking at my insurance coverage on it through State Farm and realized I still have full coverage on it same as our Mazda. Should I be thinking about dropping everything except liability coverage on this? It would save a decent amount of money a year, maybe $500? Or should I keep the coverage? There's so much conflicting info out there on this topic!
May 23, 2017, 10:01 PM
Hamden106When the cost of repairing a fender bender is the same as or more than the sale value. Or before that.
I had a real nice 87 Camry that had a bumper bender repair estimate of 2500$. The responsible drivers ins co would total the car on that rather small hit. I fought and fought the ins co. Finally settling on 2000$ straight payment and a clean title. The Camry is way too nice to total. So we fixed it ourselves for almost no $$. Since then I sold it to a friends step daughter who desperately need good wheels . The car has 120000 on it and gets 30mpg. I bought a 2017 Forrester to replace it.
May 23, 2017, 10:14 PM
rainmaker5505To me, it really depends on what the car is worth, and what it would cost/difficulty of replacement vs the added cost of carrying full coverage.
My 2014 Tundra and the Wife's GX460 will probably carry full coverage for another 10 years because they hold value so well. On the other hand, I have a beater that I drive to my relatively dirty job so my nicer cars stay that way, and I only carry liability on it. I'm a mechanic, so I have a seemingly endless supply of cheap cars coming my way should I need a new one, which makes the choice easy for me. Hell, my current "beater" is a one-owner BMW 325is that I have maybe $300 invested in. Not too shabby for me.
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Dallas239When you can truly afford to self insure. If it got stolen or totaled tomorrow, could you afford to replace it without hardship? If so, consider dropping the non-required insurance. Your premiums are based on the risk-adjusted cost of repair or replacement. So theoretically, if you stick those monthly premiums in a savings account, you could use them to pay for any loss, and you won't be paying any profit to the insurance company.
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Feeding Trolls Since 1995 May 23, 2017, 10:53 PM
ontmarkquote:
Originally posted by Dallas239:
When you can truly afford to self insure. If it got stolen or totaled tomorrow, could you afford to replace it without hardship? If so, consider dropping the non-required insurance.
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May 23, 2017, 11:04 PM
TomVI had my older Accord stolen. Since I had dropped Liability, I had to deal with the towing, storage fees and an Impound Lot in San Francisco. And​ then figuring out what to do with it. Wasn't worth dropping the coverage (in the future) for me.
May 23, 2017, 11:09 PM
chongosuerteI'd say once you are comfortable paying out of pocket for the total value the insurance company would give you if the vehicle was totaled.
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May 24, 2017, 02:04 AM
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May 24, 2017, 06:02 AM
SgtGoldquote:
Originally posted by Dallas239:
When you can truly afford to self insure. If it got stolen or totaled tomorrow, could you afford to replace it without hardship? If so, consider dropping the non-required insurance. Your premiums are based on the risk-adjusted cost of repair or replacement. So theoretically, if you stick those monthly premiums in a savings account, you could use them to pay for any loss, and you won't be paying any profit to the insurance company.
This is excellent advice. To this I'll add on older cars I drop collision but keep fire/theft. It's cheap coverage just in case. State laws differ, but in NY collision pays you for your damage. If someone causes your accident and has insurance, their provider will pay even if they didn't carry collision.
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May 24, 2017, 06:08 AM
egregoreThe portion of my insurance premium that goes to collision ($500 deductible) is ~$112 for 6 months. $225 a year is less than half of
one payment. I'll take it.
May 24, 2017, 08:59 AM
Jus228I still have full coverage on my 01 Tacoma. It's still in such good shape and the insurance is so cheap I see no reason to change it.
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May 24, 2017, 09:07 AM
SIG4EVAI look at it this way. It's maybe $20-30 per vehicle for full coverage. At this point, I don't have savings or the cash to cover a total loss, even at $3000, so I keep it.
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May 24, 2017, 09:15 AM
chellim1quote:
Originally posted by chongosuerte:
I'd say once you are comfortable paying out of pocket for the total value the insurance company would give you if the vehicle was totaled.
This.
quote:
It would save a decent amount of money a year, maybe $500? Or should I keep the coverage?
1. What's the FMV of the car? This is the amount the insurance company will give you if it's totaled.
A quick look on Craigslist and I see one for :
2007 Honda Civic - $4000
2. What's your annual savings?
You have to ask your agent to quote it both ways, which he will do in a couple of minutes over the phone.
3. What's your deductible?
So in this example, if the car is worth $4000 and you would save $500 the first year, and they aren't covering the first $500 anyway, the insurance is really only covering $3000.
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