Auto Insurance -Drop Full Coverage?

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GottaRun
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Joined: Mon Apr 28, 2014 11:17 pm

Auto Insurance -Drop Full Coverage?

Post by GottaRun » Sun Dec 03, 2017 9:39 pm

Just wondering if there is a rule-of-thumb for dropping car insurance from full coverage to liability only?

I've got an older Subaru Outback with 140,000 miles.

The car has been fantastic and runs and drives great. Planning to drive it "into the ground."

Full coverage with $1000 deductible is about $300 per 6 months.

If I drop the car to liability only it's $90 per 6 months.

KBB (kelly Blue Book) trade in value is currently about $7000.

Just wondering when other Bogleheads "normally" drop down to liability only?

student
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Re: Auto Insurance -Drop Full Coverage?

Post by student » Sun Dec 03, 2017 9:41 pm

Many of friends and myself will drop coverage in your situations.

sport
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Re: Auto Insurance -Drop Full Coverage?

Post by sport » Sun Dec 03, 2017 10:37 pm

You might want to drop collision which is expensive and keep comprehensive which is relatively cheap. Even with lower deductibles, comprehensive does not cost very much.

DrGoogle2017
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Re: Auto Insurance -Drop Full Coverage?

Post by DrGoogle2017 » Sun Dec 03, 2017 11:15 pm

When the Kelley Blue Book is less than $4000 for me.

ccieemeritus
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Re: Auto Insurance -Drop Full Coverage?

Post by ccieemeritus » Mon Dec 04, 2017 12:15 am

I’ve dropped collision and comprehensive on my older cars (where replacing them would not be a financial hardship) but keep it on my wife’s newer Lexus.

Your liability price seems low. I suggest you check your liability coverage amount and make sure it’s well above minimum.

Momus
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Re: Auto Insurance -Drop Full Coverage?

Post by Momus » Mon Dec 04, 2017 12:27 am

Yes, liability for $90/6 months means you only get state minimum coverage, what is it nowadays 15k mandatory for bodily injury coverage only in CA? That's like a joke.

Hit someone and you will be liable for $100k-300k in bodily injury. Had this happen to my friend, she rear ended someone gently 100k in claim out of pocket since lawyer knows she has money. Some people will treat an accident like a lottery money. Fake their claim to get $$$.

Increase your liability insurance, drop the full coverage.

SpaethCo
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Re: Auto Insurance -Drop Full Coverage?

Post by SpaethCo » Mon Dec 04, 2017 1:11 am

Consider more than the cost of the vehicle. If you get into a crash that’s your fault, do you want to handle the logistics of paying for towing to a holding yard, storage fees at the holding yard, and final transportation to a salvage yard? If you get into a crash that’s not your fault, do you want to spend hours tracking down your claim against the other person’s insurance?

All of those things become your problem when you don’t carry collision coverage. I’d push to get a collision deductible up to $2500 before I’d drop coverage completely. You can’t just walk away from the car after a wreck — someone needs to take care of the costs and logistics of getting that car off the road and to its next stage of being (scrap, charity, tech school, whatever). In my experience, being able to be 100% done with your old car by handing the title to your insurance adjuster and immediately move on to finding a replacement car is a priceless benefit. On a low value vehicle the benefit is in time and logistics, not replacement of the vehicle's value.

Chip
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Re: Auto Insurance -Drop Full Coverage?

Post by Chip » Mon Dec 04, 2017 4:58 am

Momus wrote:
Mon Dec 04, 2017 12:27 am
Yes, liability for $90/6 months means you only get state minimum coverage, what is it nowadays 15k mandatory for bodily injury coverage only in CA? That's like a joke.
It depends on where you live, how much you drive, and other risk factors.

I have 300/500/100 liability on both vehicles. These are the minimum requirements for my umbrella policy.

Six month premiums for the two are $77 and $100.

Sometimes it pays to live in flyover country.

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Toons
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Re: Auto Insurance -Drop Full Coverage?

Post by Toons » Mon Dec 04, 2017 6:18 am

"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

gtd98765
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Re: Auto Insurance -Drop Full Coverage?

Post by gtd98765 » Mon Dec 04, 2017 7:05 am

Note that collision insurance typically provides the same coverage on rental cars as well. So if you are in the good habit of declining the CDW when you rent a car, you may have to reconsider that without collision.

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dm200
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Re: Auto Insurance -Drop Full Coverage?

Post by dm200 » Mon Dec 04, 2017 9:37 am

gtd98765 wrote:
Mon Dec 04, 2017 7:05 am
Note that collision insurance typically provides the same coverage on rental cars as well. So if you are in the good habit of declining the CDW when you rent a car, you may have to reconsider that without collision.
Yes - beyond the narrow risk/reward of the collision/comprehensive premium vs loss - consider:

1. if you rent a car, your collision/comprehensive coverage can allow you to safely decline expensive insurance

2. If another driver is at fault for damage to your car and that driver and/or his/her insurance balk at paying - filing on your collision can get your insurance company to go after the other driver/insurance. They are better at doing that than most of us.

BogleMelon
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Re: Auto Insurance -Drop Full Coverage?

Post by BogleMelon » Mon Dec 04, 2017 9:56 am

"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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JDCarpenter
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Re: Auto Insurance -Drop Full Coverage?

Post by JDCarpenter » Mon Dec 04, 2017 10:01 am

If a tree were to fall on your car and total it, would you be able to easily replace it? That's been our rule of thumb. My last/first new car has never had anything other than liability and UM ...
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BolderBoy
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Re: Auto Insurance -Drop Full Coverage?

Post by BolderBoy » Mon Dec 04, 2017 12:21 pm

SpaethCo wrote:
Mon Dec 04, 2017 1:11 am
Consider more than the cost of the vehicle. If you get into a crash that’s your fault, do you want to handle the logistics of paying for towing to a holding yard, storage fees at the holding yard, and final transportation to a salvage yard? If you get into a crash that’s not your fault, do you want to spend hours tracking down your claim against the other person’s insurance?

All of those things become your problem when you don’t carry collision coverage. I’d push to get a collision deductible up to $2500 before I’d drop coverage completely. You can’t just walk away from the car after a wreck — someone needs to take care of the costs and logistics of getting that car off the road and to its next stage of being (scrap, charity, tech school, whatever). In my experience, being able to be 100% done with your old car by handing the title to your insurance adjuster and immediately move on to finding a replacement car is a priceless benefit. On a low value vehicle the benefit is in time and logistics, not replacement of the vehicle's value.
These are wonderful observations and didn't occur to me (probably didn't occur to most people!)

Thank you.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect

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