Scenario:
car: 2007 Honda Civic
miles: 181,000
condition: good, plan to drive a while yet or until it starts to fall apart
insurance coverage: full
KBB says car is worth around $3,000

I messaged my State Farm insurance guy about dropping to *just* liability coverage (which will save me around $78 a month) and he basically balks and tells me that "oh no, it's a bad idea, in this litigious society you could be in one accident but have a garnishment attached to every paycheck for the rest of your life because your coverage wasn't adequate".

Is this guy bullshitting me or what? He also made it sound like he can't drop coverage to just liability on my car without affecting my wife's car (which is still being paid for and requires full coverage).

The whole thing sounds like a load of bullshit to me. I'm going to be shopping around for new insurance soon anyway with this house we are in the process of buying and will need homeowner's on. I've been with State Farm since I was 16 years old but maybe it's time for a change.

quote:

I've been with State Farm since I was 16 years old but maybe it's time for a change.

It pays to shop.

I think he's bullshitting you. If you have liability coverage you don't have to worry about "you could be in one accident but have a garnishment attached to every paycheck for the rest of your life because your coverage wasn't adequate".... unless your liability limits aren't high enough.

Not bull shit

In this day and age you are F-ing nuts if you don't have 100/300 coverage with UM/UIM coverage as well.

I was an insurance defense lawyer. Just helped a client pay a person close to six figures in CASH because his car was in an accident that almost killed a lady, he had $25,000 in coverage.

quote:

Originally posted by PASig:
Scenario:
car: 2007 Honda Civic
miles: 181,000
condition: good, plan to drive a while yet or until it starts to fall apart
insurance coverage: full
KBB says car is worth around $3,000

I messaged my State Farm insurance guy about dropping to *just* liability coverage (which will save me around $78 a month) and he basically balks and tells me that "oh no, it's a bad idea, in this litigious society you could be in one accident but have a garnishment attached to every paycheck for the rest of your life because your coverage wasn't adequate".

Is this guy bullshitting me or what? He also made it sound like he can't drop coverage to just liability on my car without affecting my wife's car (which is still being paid for and requires full coverage).

The whole thing sounds like a load of bullshit to me. I'm going to be shopping around for new insurance soon anyway with this house we are in the process of buying and will need homeowner's on. I've been with State Farm since I was 16 years old but maybe it's time for a change.

Ask him for a list of each coverage and the circumstances each covers. Liability covers you for claims that you have injured someone else or their property.

The rest are basically paying you for damage done by you to your own property, like collision coverage. Uninsured motorist coverage pays you if the damage is caused by someone who has no or maybe inadequate insurance.

Sometimes these are offered together, you have to take the package.

It's important to have adequate dollar limits.

Most states require liability insurance, but I would not carry the parts that ensure the value of a 3k car. And do shop around.

quote:

Originally posted by Timdogg6:
Not bull shit

In this day and age you are F-ing nuts if you don't have 100/300 coverage with UM/UIM coverage as well.

I was an insurance defense lawyer. Just helped a client pay a person close to six figures in CASH because his car was in an accident that almost killed a lady, he had $25,000 in coverage.

^^ He's absolutely correct. I also had a client who had to write a large check because they were sued beyond their limits. Expensive cars and massive medical bills will blow most normal auto policy limits.

I'm an estate planning attorney and asset protection is something we discuss with all of our clients. We tell them all that they should have an umbrella policy at least large enough to cover the value of assets that are subject to judgment. This, of course, varies by state. Generally no garnishment in my state.

quote:

Originally posted by Timdogg6:
In this day and age you are F-ing nuts if you don't have 100/300 coverage with UM/UIM coverage as well.

I was an insurance defense lawyer. Just helped a client pay a person close to six figures in CASH because his car was in an accident that almost killed a lady, he had $25,000 in coverage.

I read the OP, and then read it again. I did not see anyplace where PASig stated that he was considering minimizing the amount of liability coverage, all I saw was that he was considering dropping other coverages, such as collision and comp. I'm sure that somebody will be along shortly to correct me if I'm wrong.

I am doing exactly what I understand PASig is considering: our oldest and least valuable car is covered for liability only. The other two are covered for collision / comp in addition to liability. All three are on the same family auto policy. This is with Travelers. Our agent looked it over and agreed with what we are doing.

The OP didn't say what his liability limits are now, but I agree that the minimum required liability coverage is not enough in this age of (sometimes) BS lawsuits and dumbass generous juries. So for his case my approach would probably to be drop the comprehensive/collision and, if it's on the low side, beef up the liability limits. I'm guessing it would still end up being a lower premium that what he's paying now, although maybe not as much lower as if he leaves his current liability alone.

I just recently had my 20 year old pickup totaled. I still had full coverage on it and the insurance company paid me at least double what I'd have been able to sell it for. They based the calculation on model year (age), what options were installed, and mileage. It did not take into account the fact that the truck was a little beat up cosmetically (before the wreck), and that would have lowered the price that I could sell it for considerably. I asked the agent what the liability-only coverage would have been on the truck, and then subtracted that from the full coverage premium. I multiplied the difference out over the 16 years that the loan has been paid off, and the total that I paid for full coverage, above and beyond the liability, over that time was about equal to what they gave me for it. It's only an estimate because the premium rates have changed over time and I don't have enough old records to do a more accurate calculation. So keeping full coverage after your load is paid off may or may not pencil out depending on how long you keep the vehicle, etc. If you wind up never having to make a major claim against the comp/collision, then you're better off not paying the premium for it when you don't have to. Of course, you don't know whether you're going to have make that claim until it happens, and by then it's too late to change your strategy.

On the surface - bullshit.
But, I think he might have misunderstood you (at least I hope so anyway).

If you were involved an at-fault accident, the fact you didn't or didn't have collision coverage doesn't come into play AT ALL with regards to the liability claim.

Personally, I'd have the highest liability limits your state offers. Umbrella policy isn't a bad idea either.

Re: dropping Collision/OTC. Look at it this way - if you dropped the coverage, you'd have saved the value of the car in less than 3 years.
Not to mention KBB values are generally inflated and almost no carrier pays based off if it. Autotrader.com will give you a realistic idea of what it's worth.

And yes, I'd find an independent agent and shop your insurance. There are better carriers out there that give you better coverage for less.

quote:

Originally posted by cheesegrits:

quote:

Originally posted by Timdogg6:
Not bull shit

In this day and age you are F-ing nuts if you don't have 100/300 coverage with UM/UIM coverage as well.

I was an insurance defense lawyer. Just helped a client pay a person close to six figures in CASH because his car was in an accident that almost killed a lady, he had $25,000 in coverage.

^^ He's absolutely correct. I also had a client who had to write a large check because they were sued beyond their limits. Expensive cars and massive medical bills will blow most normal auto policy limits.

I'm an estate planning attorney and asset protection is something we discuss with all of our clients. We tell them all that they should have an umbrella policy at least large enough to cover the value of assets that are subject to judgment. This, of course, varies by state. Generally no garnishment in my state.

Seems to me this is a quesion of policy limits, not liability vs comprehensive. I can't see any reason why a liability policy would leave you in worse shape than any other kind of policy with the same limits.

I still have full coverage on my 2001 Tacoma. Its insanely cheap so I didn't see the downside. It's barely $400 per year.

maybe this will help:

Auto Insurance Glossary of Terms
If you feel like you need to take a foreign language course to "speak insurance" don't worry, you're not alone! But, you need to at least understand the basic auto insurance terms because they spell out what you are and aren't covered for in your policy. Here is a translation of some basic insurance lingo:

$25/50/15
You will see three numbers when you are buying liability coverage. They represent (in the $ thousands) your liability limits for per-person bodily injury, bodily injury for all persons injured in any one accident, and property damage liability. Most states require a mandatory minimum amount and insurance companies offer the option to purchase more.

Automobile Liability Insurance
Protection in case others hold you legally responsible for bodily injury and/or damage to property losses incurred as the result of a motor vehicle accident. In other words, coverage in case you cause an accident where there is either physical or property damage to other people. This is a general term that covers bodily injury (BI) liability and property damage (PD) liability. See explanation of limits, above.

Bodily Injury Liability Insurance (BI)
BI pays for injuries to other people when the insured vehicle's driver is legally at fault. This coverage is required in Colorado, New Mexico, Utah and Wyoming.

Collision Coverage
Optional coverage for when your car is damaged as a result of colliding with another object—a brick wall, for example, or a rollover. It also can come into play if you hit a pothole that severely damages your car. This insurance applies only to your car. It doesn't cover whatever the car collided with (that's what your property damage liability is for). According to 2004 data from the National Association of Insurance Commissioners, 72 percent of insured drivers carry this coverage.

Comprehensive Coverage
Optional coverage for when your car is stolen or damaged in ways that don't involve a collision. Examples include: hail damage, glass breakage, fire, vandalism, damage from an animal, flood, earthquakes, falling objects and theft. The price of comprehensive insurance is affected by the risk of loss, meaning the likelihood that an insured car will be stolen or damaged, and the car's value at the time of the loss. According to 2004 data from the National Association of Insurance Commissioners, 77 percent of insured drivers carry this coverage.

Declarations Page ("Dec Page")
The first page of the insurance policy that generally includes your name, address, the insured property, its location and description, the policy period (how long the coverage will be in force), the amount of the insurance coverage, the premiums and additional specific information provided by the insured.

Deductible
This is your out-of-pocket expense that you agree to pay for losses up to set amount, such as $250 or $1,000. If you can afford to carry a higher deductible on collision and comprehensive coverage, you can substantially lower your costs.

Economic Benefits
Tangible, out-of-pocket expenses, such as medical expenses, rehabilitation expenses, lost wages and essential services.

Financial Responsibility Law
Typically, this refers to the law that requires motorists to have auto insurance, however most states also permit a bond or cash deposit as evidence of the ability to pay for negligence in causing losses to others from the operation of a motor vehicle. In 47 states and the District of Columbia, it is illegal to operate a vehicle without obtaining proof of insurance.

McCarran-Ferguson
Enacted by Congress in 1945, this law grants authority to the states to tax and regulate the business of insurance (see regulation).

Medical Payments Coverage (MP or Med Pay)
This coverage (usually optional) pays the doctor, hospital bills, and funeral expenses for injuries to you and the passengers in your car, regardless of who causes the accident, up to the policy limits. Med Pay is sold in states with traditional tort insurance laws. In states where Med Pay is optional, drivers may choose to rely on their own and their passengers' own health insurance to cover resulting injuries. Most insurance companies offer a wide range of coverage amounts.

Monetary Threshold
In some "no-fault" states, a dollar amount for medical and rehab expenses that must be reached in order to file a lawsuit for damages for non-economic damages (i.e. pain and suffering) against the driver who caused the accident. For example, under Colorado's old no-fault law, you could sue for pain and suffering if you racked up a threshold of $2,500 in medical expenses (nullifying the no-fault law). See verbal threshold.

No-Fault Auto Insurance
There are different versions of no-fault auto insurance laws in 12 states and Puerto Rico. In theory, the system is supposed to discourage lawsuits by allowing policyholders to recover financial losses from their own insurance company without having to prove that anyone is at fault in an accident. Motorists may only sue for injuries and for pain and suffering if their case meets certain minimum conditions. Seven states, including Utah, require that you meet a minimum dollar threshold to be able to bring a lawsuit over damages over and above your economic losses. Florida, Michigan, New Jersey, New York and Pennsylvania use a verbal description as a threshold (i.e. severe disfigurement, disability or death). In New Jersey, Pennsylvania and Kentucky, motorists may choose to reject the lawsuit threshold on their insurance policy and keep their right to sue for any auto-related injuries. Click here to learn about Colorado's transition from no-fault to tort.

Non-Economic Benefits
Intangible benefits, such as pain and suffering, inconvenience, emotional stress, impairment of quality of life, loss of consortium, etc.

Personal Injury Protection (PIP)
This a package of first-party medical benefits that provides broad protection for medical costs, lost wages, loss of essential services normally provided by the injured person (i.e. childcare, housekeeping), and funeral costs. It is usually associated with a no-fault auto insurance system.

Property Damage Liability (PD)
This coverage is for when you damage someone else's property with your vehicle. Usually it's someone's car, but it can apply to other property such as buildings, utility poles, fences and garage doors.

Rate
This is the cost of a unit of insurance (usually $1,000 worth). Insurance is based on the history of loss experience for similar risks. What a driver pays for auto insurance is based in part on past experience by that company with drivers categorized by similar factors such as age, gender, marital status, driving record and make and model of car.

Regulation
The insurance industry is state regulated. State insurance laws are administered by insurance departments whose job includes approval of rates and policy forms, investigation of company practices, review of annual financial statements, periodic examination of books and liquidation of insolvent insurers (see McCarran-Ferguson).

Third Party
In an insurance contract, a third party is anyone other than the policyholder and the family members covered under the insurance policy. The policyholder is the first party. The insurance company is the second party in the contract. Anyone else is a third party.

Threshold
A cutoff point, which, if met, allows the injured person to file a lawsuit to attempt to recover damages for bodily injury, such as "pain and suffering," from the driver who caused the accident.

Tort
A wrongful act resulting in damage or injury, on which a civil action can be based. This does not include breach of contract.

Uninsured/Underinsured Motorist Coverage (UM)
It pays (up to the coverage limit) the insured person and other passengers in the vehicle when they're injured as the result of an accident where the at-fault driver is uninsured, underinsured or a hit-and-run. This also comes in a second form - UMPD - to cover damage to your vehicle if hit by an uninsured or underinsured driver. However, most people do not purchase the second form because they carry collision and comprehensive coverage.

Verbal (or Descriptive) Threshold
A description of the type of serious injury a person must sustain before being allowed to file a lawsuit for damages for bodily injury against the driver who caused the accident. See monetary threshold.

quote:

Seems to me this is a quesion of policy limits, not liability vs comprehensive. I can't see any reason why a liability policy would leave you in worse shape than any other kind of policy with the same limits.

Correct, Liability covers damage to others/property caused by you/your vehicle.

Unless the carrier has some odd rule there is no reason you should have to carry full coverage because your wife has full coverage,

However you may be getting discounts that if you drop your coverage go away and will raise your wifes cost.

I would ask to run a liability quote with the same limits on your Honda as her car but no comp, collision or other coverages, you may want to consider UM at least $25K

Listen to Snake207. He knows what he's talking about. Been in the business "a little longer" than 17 years but high limits and an umbrella are very good ideas.

And yes I'd find an independent agent. He represents more than one company and can find you what you need.

quote:

Originally posted by Perception:
Seems to me this is a quesion of policy limits, not liability vs comprehensive. I can't see any reason why a liability policy would leave you in worse shape than any other kind of policy with the same limits.

The response of the agent is odd--he mentioned garnishment to the OP and that sounds as if he was talking about a situation arising from poor liability coverage when the OP asked him about dropping another type of coverage. (Likely why the OP is calling BS.)

My response was based on seeing what has happened to a client with inadequate liability coverage.

quote:

I'm an estate planning attorney and asset protection is something we discuss with all of our clients. We tell them all that they should have an umbrella policy at least large enough to cover the value of assets that are subject to judgment. This, of course, varies by state. Generally no garnishment in my state.

That's what we've had for years. Covers not only car-related liability, but injury to someone at your home, etc.

quote:

Originally posted by sjtill:

quote:

I'm an estate planning attorney and asset protection is something we discuss with all of our clients. We tell them all that they should have an umbrella policy at least large enough to cover the value of assets that are subject to judgment. This, of course, varies by state. Generally no garnishment in my state.

That's what we've had for years. Covers not only car-related liability, but injury to someone at your home, etc.

Yep, me too. I can't imagine not having an umbrella policy in this day and age. Some insurers don't make it available unless you have full coverage. I know of someone that lost everything because he hit someone in a crosswalk at night that was wearing all dark clothing and he ended up in a wheelchair for life.

Jim

I have State Farm and had no problem not having collision on my older car. In your case paying $900 a year for a $3000 auto that probably also has a deductible does not make a lot of sense as long as you could afford to replace it if something did happen.

My agent also talked me into uninsured motorist property damage for the old care that was like $17 for 6 months.

Something does not sound right though. State Farm is charging me $57.22 for SIX months for collision on my 2004 Accord. I live in Illinois about 40 mile from Chicago.

Here is what I pay through State Farm for my 2004 Accord. We switched over the Sate Farm this year February 1, 2017. Rates actually went down a little bit after the 6 month renewal. I am married and 65 years old. No accidents or moving violations for either of us in a long time and we have the discount for having our home owners policy with State Farm, multiple auto discount, and a discount for low yearly mileage on this Accord at I think 5000 miles a year. it would not be that much more for more normal usage.

2004 HONDA ACCORD 4DR

Liability Coverage

Bodily Injury Limits
Each Person, Each Accident
$250,000 $500,000
Property Damage Limit
Each Accident
$200,000

$119.12 / 6 mos

Medical Payments Coverage

Limit - Each Person
$25,000

$17.04 / 6 mos

Comprehensive Coverage - $100 Deductible

$13.13 / 6 mos

Collision Coverage - $500 Deductible

$57.22 / 6 mos

Emergency Road Service Coverage

$4.60 / 6 mos

Car Rental and Travel Expenses Coverage

Limit - Car Rental Expense
Each Day, Each Loss
$25 $600

$8.36 / 6 mos

Uninsured Motor Vehicle Coverage

Bodily Injury Limits
Each Person, Each Accident
$250,000 $500,000

$11.01 / 6 mos

Underinsured Motor Vehicle Coverage

Bodily Injury Limits
Each Person, Each Accident
$250,000 $500,000

$30.91 / 6 mos

quote:

"oh no, it's a bad idea, in this litigious society you could be in one accident but have a garnishment attached to every paycheck for the rest of your life because your coverage wasn't adequate".

That's what liability insurance is for, isn't it? And the car is right on the edge of not being worth insuring for collision. The bigger question is can you afford to replace it if it did get totaled and it was your fault.

I carry an umbrella policy, in order to have that, I have to keep a high level comprehensive policy on the cars. I do have my deductible set pretty high, which saves a great deal, but I can't have a liability only policy on my cars and keep the umbrella policy (though this doesn't make a lot of sense to me, but since I both need the umbrella policy and want some level of comprehensive insurance, I accept it). Overall, it doesn't seem to cost that much extra through my insurance (USAA) to have this level of coverage, given my fairly high deductible.