New Car: No Collision/Comprehensive?

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bagelhead
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New Car: No Collision/Comprehensive?

Post by bagelhead » Sun Oct 07, 2018 7:39 pm

If one can self-insure on a paid off new car, is there any significant advantage to getting Collision and Comprehensive insurance? Specifically, is there any scenario where one gets into an accident and needs either the insurance company's representatives or their lawyers to assist -- but they will only assist if one had C/C?

For example, if someone hits your car and is likely at fault, can you call your insurance company for subrogation, so they can deal with the other person's insurance company (since you have auto liability insurance)?

123
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Re: New Car: No Collision/Comprehensive?

Post by 123 » Sun Oct 07, 2018 9:36 pm

Some people find value in buying Uninsured and/or Underinsured Coverage. I think most of the time if you want those coverages to protect your own vehicle you need to carry Collision/Comprehensive on it.

If you have Collision/Comprehensive on your own vehicle and are involved in an accident you can get your own vehicle fixed/replaced regardless of fault. It is possible that the other driver's insurance may say you are at fault and will not fix your car. If you have Collision/Comprehensive your carrier will deal with the other company if you wish and you are only out your deductible until the other insurer settles. Your own insurance company will likely only go after the other side if your own insurance company can save itself some money.

Some people might assume that they can easily cover replacement costs of their vehicle. However what if the same thing happens again in 1 month with the replacement vehicle they purchased themselves?
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srt7
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Re: New Car: No Collision/Comprehensive?

Post by srt7 » Sun Oct 07, 2018 10:57 pm

IMHO it isn't just about being able to cover the cost of your totaled car. What about the other car? Sure, you're a safe driver but [stuff --admin LadyGeek] happens and you could be at fault so consider paying for that brand new Tesla you just hit as well. Can you pay for it? What about medical bills? What about paying for property (not cars) destruction? What about getting sued? And most importantly, are you willing to go fight with lawyers who represent top insurance companies?

Skipping minimum insurance (as required by state law) is being penny wise and pound foolish.
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rgs92
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Re: New Car: No Collision/Comprehensive?

Post by rgs92 » Sun Oct 07, 2018 11:01 pm

I get both even though my cars are paid off, just with high deductible ($1000-$2000).
I don't want to lose $30-50K in 2 seconds.

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grabiner
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Re: New Car: No Collision/Comprehensive?

Post by grabiner » Sun Oct 07, 2018 11:09 pm

srt7 wrote:
Sun Oct 07, 2018 10:57 pm
IMHO it isn't just about being able to cover the cost of your totaled car. What about the other car? Sure, you're a safe driver but [stuff --admin LadyGeek] happens and you could be at fault so consider paying for that brand new Tesla you just hit as well. Can you pay for it? What about medical bills? What about paying for property (not cars) destruction? What about getting sued? And most importantly, are you willing to go fight with lawyers who represent top insurance companies?
All of these are covered by other insurance than collision and comprehensive. The OP isn't planning to avoid liability insurance, and if he can afford to buy a new car out of pocket, he presumably has enough assets to need much more than the minimum there.

The argument for collision on a new car is that you have the insurance company as an advocate. If you have a $2000 deductible and your car has $5000 worth of damage, you can pay the deductible and then let the insurance company deal with the other driver's insurance; it stands to recover $3000 if it can establish that the other driver was at fault. If you don't have collision coverage and the other driver's insurance refuses to pay or disagrees on the amount of damage, you'll have to deal with them yourself. (If someone is injured in the accident, insurance will need to be involved anyway.)
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srt7
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Re: New Car: No Collision/Comprehensive?

Post by srt7 » Sun Oct 07, 2018 11:21 pm

grabiner wrote:
Sun Oct 07, 2018 11:09 pm
srt7 wrote:
Sun Oct 07, 2018 10:57 pm
IMHO it isn't just about being able to cover the cost of your totaled car. What about the other car? Sure, you're a safe driver but [stuff --admin LadyGeek] happens and you could be at fault so consider paying for that brand new Tesla you just hit as well. Can you pay for it? What about medical bills? What about paying for property (not cars) destruction? What about getting sued? And most importantly, are you willing to go fight with lawyers who represent top insurance companies?
All of these are covered by other insurance than collision and comprehensive. The OP isn't planning to avoid liability insurance, and if he can afford to buy a new car out of pocket, he presumably has enough assets to need much more than the minimum there.

The argument for collision on a new car is that you have the insurance company as an advocate. If you have a $2000 deductible and your car has $5000 worth of damage, you can pay the deductible and then let the insurance company deal with the other driver's insurance; it stands to recover $3000 if it can establish that the other driver was at fault. If you don't have collision coverage and the other driver's insurance refuses to pay or disagrees on the amount of damage, you'll have to deal with them yourself. (If someone is injured in the accident, insurance will need to be involved anyway.)
Exactly!
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Watty
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Re: New Car: No Collision/Comprehensive?

Post by Watty » Mon Oct 08, 2018 12:09 am

bagelhead wrote:
Sun Oct 07, 2018 7:39 pm
Specifically, is there any scenario where one gets into an accident and needs either the insurance company's representatives or their lawyers to assist -- but they will only assist if one had C/C?
When you have a fender bender and you have full insurance the the car can be taken to a body shop and the work can start right away since your insurance company will either pay for it or collect the money from the other insurance company.

Without the full coverage it can take a long to to get the other insurance company to agree to pay and until they agree to pay you may not be able to have the body shop start work since their adjusters would want to see the car before the repairs.

If you are pretty well off and can afford to occasionally write off the cost of a car then you can afford the collision and comprehensive with a high deductible. When you get quotes you will likely find that this is just a small part of your insurance cost.

B4Xt3r
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Re: New Car: No Collision/Comprehensive?

Post by B4Xt3r » Mon Oct 08, 2018 6:21 am

My opinion is that insurance is only needed when you cannot afford the risk. If you can, why pay insurance companies for a service you can already afford yourself? Seems wasteful unless the mental satisfaction you derive from being insured is worth the premium.

spectec
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Re: New Car: No Collision/Comprehensive?

Post by spectec » Mon Oct 08, 2018 6:38 am

Seems like the same reasoning could be used for not insuring one's home if you can afford losing it. In either situation, the premiums are roughly proportional to the risk of loss and value of the asset.
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JustMe
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Re: New Car: No Collision/Comprehensive?

Post by JustMe » Mon Oct 08, 2018 6:46 am

One thing to be aware of is coverage of rental cars. Check your own policy, but many (possibly most?) policies will extend collision/comprehensive coverage to rental cars. Depending on what age and type of car you own, a rental vehicle may cost significantly more to repair or replace than the personal vehicle you choose to self-insure.

Although some credit cards may offer coverage, be aware of the fine print. Especially, are you covered if the credit card is used as a guarantee but not as payment, for instance paying with points or a "free" loaner car while getting your car serviced?

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Re: New Car: No Collision/Comprehensive?

Post by Rupert » Mon Oct 08, 2018 8:03 am

bagelhead wrote:
Sun Oct 07, 2018 7:39 pm

For example, if someone hits your car and is likely at fault, can you call your insurance company for subrogation, so they can deal with the other person's insurance company (since you have auto liability insurance)?
So here's the Black's Law Dictionary definition of subrogation: "The principle under which an insurer that has paid a loss under an insurance policy is entitled to all the rights and remedies belonging to the insured against a third party with respect to the loss covered by the policy."

In the context of auto insurance, subrogation is the process that allows your insurance company to collect from the at-fault party's insurance company monies that it was contractually bound to pay you under your own collision coverage. It is a component of your collision coverage, not of your liability coverage. So if you don't carry collision, then, no, you can't use the subrogation process to collect from an at-fault party.

And just fyi: Subrogation is limited to the amount of money that your insurance company has paid you under your own collision policy, which is why you typically can't collect damages for diminished value via subrogation. (Diminished value is not covered under collision in most states). You have to deal directly with the at-fault party's insurance company for that even if you file a collision claim and utilize subrogation to collect all other damages from the accident.

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Re: New Car: No Collision/Comprehensive?

Post by Jack FFR1846 » Mon Oct 08, 2018 8:11 am

I keep comp on all my cars. This includes my 9 year old Ford Fusion that's worth less than $3k. Why? Windshield coverage with zero deductible.
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jjface
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Re: New Car: No Collision/Comprehensive?

Post by jjface » Mon Oct 08, 2018 8:13 am

If you have ever had to deal with someone else's insurance company after an accident then you will know the value of collision/comp insurance. Heck I have even changed my tune about dropping this type of insurance on an older car as well. I would only drop it if I couldn't afford it.

RickBoglehead
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Re: New Car: No Collision/Comprehensive?

Post by RickBoglehead » Mon Oct 08, 2018 8:42 am

Self insurance is great, until you have to pay. Just bought a vehicle with an MSRP close to $40,000. I can afford to self insure. I wouldn't think of it, because IF I have a big loss I'd rather my money be in the market. Further, you need to understand the actual cost of collision and comp as part of your total insurance cost. For my 2013 F-150, my collision coverage ($500 deductible) is 30% of the total cost. My comp coverage is 6.5% of the total cost. For a savings of $400 a year, I don't want to have to shell out thousands, or tens of thousands, to repair my vehicle. Go price a BLIS taillight, it's over $1,000 itself.

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DanMahowny
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Re: New Car: No Collision/Comprehensive?

Post by DanMahowny » Mon Oct 08, 2018 9:03 am

I bought 2 new cars in 2015.

Liability insurance only. Easy decision for me.
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dm200
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Re: New Car: No Collision/Comprehensive?

Post by dm200 » Mon Oct 08, 2018 10:08 am

DanMahowny wrote:
Mon Oct 08, 2018 9:03 am
I bought 2 new cars in 2015.

Liability insurance only. Easy decision for me.
I also believe Uninsured/Underinsured motorist is essential. In our state, such coverage is mandatory.

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DanMahowny
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Re: New Car: No Collision/Comprehensive?

Post by DanMahowny » Mon Oct 08, 2018 10:25 am

dm200 wrote:
Mon Oct 08, 2018 10:08 am
DanMahowny wrote:
Mon Oct 08, 2018 9:03 am
I bought 2 new cars in 2015.

Liability insurance only. Easy decision for me.
I also believe Uninsured/Underinsured motorist is essential. In our state, such coverage is mandatory.
Yes. Thanks, I need to correct my "liability only" comment. I have uninsured/underinsured motorist coverage. I don't believe (not sure) it's mandatory in my state, but it's very inexpensive.
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adamthesmythe
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Re: New Car: No Collision/Comprehensive?

Post by adamthesmythe » Mon Oct 08, 2018 10:45 am

This is one of those cases where the insurance guy's nattering about "peace of mind" kind of makes sense.

Otherwise you start leaving the car in the garage when there is a threat of rain, when it might get dark, etc.

SpaethCo
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Re: New Car: No Collision/Comprehensive?

Post by SpaethCo » Mon Oct 08, 2018 12:31 pm

It's not purely a financial decision - you're giving up services when you cut that coverage.

If you wreck your car and you have collision, you can call to make a claim, hand the claims agent the title, and you're pretty much done.

If you don't have that coverage, all of the towing, storage, salvage arrangements, and title/registration work all become your problem. If you're not on top of your game, daily storage costs alone start to add up really fast.

Accidents are stressful. Being able to walk away from your old car and let the aftermath be someone else's problem is an underrated benefit.

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gasdoc
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Re: New Car: No Collision/Comprehensive?

Post by gasdoc » Mon Oct 08, 2018 8:55 pm

I have had two cars repaired using insurance coverage. Both were unsatisfactory in that the insurer dictated the use of parts that proved to be unacceptable, causing long delays in getting the cars back. I no longer carry collision insurance on any of our three cars and now getting cars repaired is a simple process- take it for an estimate, choose the provider, get the cat fixed.

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bottlecap
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Re: New Car: No Collision/Comprehensive?

Post by bottlecap » Mon Oct 08, 2018 9:04 pm

We had someone side swipe our parked vehicle when they backed out of a parking lot. And drove off.

$3,000 worth of damage. 3 weeks in the shop. Insurance paid for the damage and the 3 week rental under collision.

I don't know whether it makes mathematical sense, but insurance sure made my life a little less suckier.

YMMV.

JT

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Re: New Car: No Collision/Comprehensive?

Post by ProfWengen » Tue Oct 09, 2018 12:28 am

Assuming losing your car wouldn't ruin you financially, it is perfectly rational not to have comprehensive insurance. Insurance companies wouldn't be in business if they were selling you coverage at even odds, they make money because it just isn't a good deal.

Having said that, if you know something their actuaries don't know and believe your odds of getting into an accident or having your vehicle stolen are actually high then it would be worth it.

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Re: New Car: No Collision/Comprehensive?

Post by aristotelian » Tue Oct 09, 2018 9:38 am

Sure, actuarily speaking, the insurance company is coming out ahead. Still,I just don't want to be in a position of spending $30-$40K twice on a car, even if I could afford to do so. The same could be said for probably 99% of health emergencies but I still get health insurance. The peace of mind of smoothing out the cost of transportation is worth at least some premium. Of course, at a certain point the cost could be too high that I would just refuse to pay. Again, you could make the same calculus for health insurance. For what it's worth, I just purchased a new-used car for $10K and collision barely changed our rate, so I took it.

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Re: New Car: No Collision/Comprehensive?

Post by dm200 » Tue Oct 09, 2018 10:05 am

SpaethCo wrote:
Mon Oct 08, 2018 12:31 pm
It's not purely a financial decision - you're giving up services when you cut that coverage.

If you wreck your car and you have collision, you can call to make a claim, hand the claims agent the title, and you're pretty much done.

If you don't have that coverage, all of the towing, storage, salvage arrangements, and title/registration work all become your problem. If you're not on top of your game, daily storage costs alone start to add up really fast.

Accidents are stressful. Being able to walk away from your old car and let the aftermath be someone else's problem is an underrated benefit.
Yes - less aggravation and stress are benefits of being insured.

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Re: New Car: No Collision/Comprehensive?

Post by michaeljc70 » Tue Oct 09, 2018 12:53 pm

The collision/comprehensive on my policy is not that big. Exactly $200/yr. I am not going to risk a 30k loss for $200/yr even though I could afford it. And that is with $500 deductibles. The payback period of ONE total is like 150 years (assuming car is newer).

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Re: New Car: No Collision/Comprehensive?

Post by JBTX » Tue Oct 09, 2018 12:54 pm

"Afford" can have different meanings.

Yes, most here probably have the financial resources to buy another $25k (give or take) car. But that may put a material dent in your liquid funds. That could be anywhere from 3 months to 1 years savings depending on income. That is 4-5 years worth of Roth IRA's for an individual.

So how much will you save on collision and comp? $300-$400 a year?

To me that is worth just not having to deal with one more kick in the butt in an already stressful situation of an accident.

Living in an urban area, there will be accidents. I have had some, not my fault, and the other party's insurance may not always cover it. A multi car pileup for instance where it is impossible to determine who caused the car behind you to hit you.

So over a couple of decades, if things go well, what will be the net savings (claims paid by ins company less premiums) of dropping the coverage - $1000? $2000? $3000? So something between maybe $50 and $300 per year net savings? That is peanuts.

The collision/comprehensive on my policy is not that big. Exactly $200/yr. I am not going to risk a 30k loss for $200/yr even though I could afford it. And that is with $500 deductibles. The payback period of ONE total is like 150 years (assuming car is newer).
Exactly

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Re: New Car: No Collision/Comprehensive?

Post by willthrill81 » Tue Oct 09, 2018 1:04 pm

123 wrote:
Sun Oct 07, 2018 9:36 pm
Some people might assume that they can easily cover replacement costs of their vehicle. However what if the same thing happens again in 1 month with the replacement vehicle they purchased themselves?
That's a good point that I hadn't considered before.

However, the likelihood of having two vehicles totaled and being at fault for both is surely very slim unless you regularly drive inebriated or something along those lines.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: New Car: No Collision/Comprehensive?

Post by willthrill81 » Tue Oct 09, 2018 1:06 pm

Jack FFR1846 wrote:
Mon Oct 08, 2018 8:11 am
I keep comp on all my cars. This includes my 9 year old Ford Fusion that's worth less than $3k. Why? Windshield coverage with zero deductible.
How much does a windshield cost these days? It's been about a decade since I had one replaced, and I believe it was under $200.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: New Car: No Collision/Comprehensive?

Post by SpaethCo » Tue Oct 09, 2018 2:16 pm

willthrill81 wrote:
Tue Oct 09, 2018 1:06 pm
How much does a windshield cost these days? It's been about a decade since I had one replaced, and I believe it was under $200.
Replaced a windshield on a 2008 Mazda3 with rain sensing wiper sensors in 2013. Cost billed to insurance: $850

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willthrill81
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Re: New Car: No Collision/Comprehensive?

Post by willthrill81 » Tue Oct 09, 2018 2:20 pm

SpaethCo wrote:
Tue Oct 09, 2018 2:16 pm
willthrill81 wrote:
Tue Oct 09, 2018 1:06 pm
How much does a windshield cost these days? It's been about a decade since I had one replaced, and I believe it was under $200.
Replaced a windshield on a 2008 Mazda3 with rain sensing wiper sensors in 2013. Cost billed to insurance: $850
Is that the price you would have paid if you had done some searching and paid for it yourself?

Even if so, I would never buy insurance for an item valued at under $1k.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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dm200
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Re: New Car: No Collision/Comprehensive?

Post by dm200 » Tue Oct 09, 2018 2:21 pm

SpaethCo wrote:
Tue Oct 09, 2018 2:16 pm
willthrill81 wrote:
Tue Oct 09, 2018 1:06 pm
How much does a windshield cost these days? It's been about a decade since I had one replaced, and I believe it was under $200.
Replaced a windshield on a 2008 Mazda3 with rain sensing wiper sensors in 2013. Cost billed to insurance: $850
That is about what I would have expected. Not cheap, these days.

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Re: New Car: No Collision/Comprehensive?

Post by SpaethCo » Tue Oct 09, 2018 6:04 pm

willthrill81 wrote:
Tue Oct 09, 2018 2:20 pm
Is that the price you would have paid if you had done some searching and paid for it yourself?
My guess is I could have probably got the price down to around $500 if I had shopped it around myself and had them use non-OEM parts. The sensors in newer windshields make them surprisingly expensive.
willthrill81 wrote:
Tue Oct 09, 2018 2:20 pm
Even if so, I would never buy insurance for an item valued at under $1k.
Comprehensive coverage isn’t just for the windshield though. It covers other potential losses like fire, theft, severe weather damage, or hitting a deer with your car.

I pay $100/year for comprehensive coverage with a $1000 deductible, but a $0 deductible on glass.

Collision coverage is $150/year with a $2500 deductible.

Saving $250/year doesn’t offer me enough benefit to take on the potential risk of having to make a $25-30k unexpected vehicle replacement purchase.

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Re: New Car: No Collision/Comprehensive?

Post by Horsefly » Tue Oct 09, 2018 6:53 pm

So here's a real-life story that may be of some use in considering this decision.

When DW and I retired in 2013, we found ourselves cash rich (lump sum from Megacorp and numerous deferred comp payments), but cash flow poor. So I tried to figure out how to limit our periodic payments. We had two kids still in college, so we had a total of 4 cars. 3 of the cars were fairly old (2002 Ford Escape, 2005 Honda Civic, and 2004 Honda Pilot), but my wife's car was a newer 2009 Subaru Forester. On all four cars we drove way below the national average of miles: Maybe 5,000-7,000 each. As a family, we hadn't really had accidents, so I felt like it made sense to drop collision and comprehensive on all four cars, and keep liability and uninsured / underinsured coverage.

In 2016 we were on our way to a picnic east of Denver in the Subaru Forester. We were only going about 30 MPH (just accelerating from a stop sign) when an antelope jumped a 6 foot fence and ran in front of the car. The antelope was probably going faster than the car was when we hit it, and I never saw it in time to brake. Both front air bags deployed. The antelope only weighed about 70 lbs, so there wasn't much obvious damage to the car, except that the antelope's antler had pierced the radiator. Otherwise I would have driven the car myself to a shop. There was a slight ripple to the hood, but that clearly would be easy to fix.

When the car got to the body shop, they were clearly confused when I told them I didn't have any insurance for this type of incident. I told them I probably wanted to get it fixed. I knew that the air bag deployment was a big deal, but the rest of the damage was minimal.

A few days later they called me to tell me that I had two days to get the car off the lot. I was shocked. They said it was totaled by their estimation, and needed it to go to salvage. Since I didn't have insurance, it was my job to deal with the salvage shops. I scrambled to find someone to give me $1,500 and come and take away the car.

It took me a few weeks to figure out the whole story. Turns out, this body shop really only dealt with insurance companies, all of which require new original equipment when repairing air bags and all the associated equipment. As an owner, I'm not required to use new original equipment to repair it. The guy who bought the car from me for $1500 talked to me later and said he got if fixed fairly quickly, and for very little money. He easily found salvaged but still fully functional air bags. He offered to tell me how much it cost if I wanted to know, but I passed. (He was obviously very proud of how cheaply he had fixed it up) He said that although he originally was just going to sell it, he liked it so much he kept it for himself. Ugh... :annoyed

This was a 2009 Forester that we paid $26K for. It was wrecked in 2016, and I think I found that the blue book for it was about $12K, but I can't remember exactly. If we had comprehensive on it, after a deductible (say $2000), I would have gotten around $10K towards a new car. Instead, I had to do lots of legwork myself, negotiating quickly with a few different salvage yards that knew they had me over a barrel, to only get $1500. A few weeks later we paid lots of money for a new car.

There are several lessons learned here. One is that if you don't have insurance for what happened, don't take it to a shop that only works with insurance companies. :oops: The second is that it is probably worth it to pay for at least high deductible collision and comprehensive on a new car until it is way past new. I don't know what the formula should be, but if the deductible is approaching 30% of the value of the car, don't bother. Otherwise, its a pretty inexpensive semi-annual payment.

Needless to say, we have collision and comprehensive on the new car.

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Re: New Car: No Collision/Comprehensive?

Post by jcchen » Tue Oct 09, 2018 9:48 pm

> For example, if someone hits your car and is likely at fault, can you call your insurance company for subrogation, so they can deal with the other
> person's insurance company (since you have auto liability insurance)?

That happened to my spouse. Spouse gave her insurance details of the accident. Her insurance said since it is clearly other person's fault AND no one was injured AND she do not have collision, the accident would be covered by other person's liability. So, her insurance would not get involved (no subrogation). She had to fight the other insurance company to get reimbursed. The other insurance did NOT make things easy for her.

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Re: New Car: No Collision/Comprehensive?

Post by willthrill81 » Tue Oct 09, 2018 10:45 pm

SpaethCo wrote:
Tue Oct 09, 2018 6:04 pm
willthrill81 wrote:
Tue Oct 09, 2018 2:20 pm
Even if so, I would never buy insurance for an item valued at under $1k.
Comprehensive coverage isn’t just for the windshield though. It covers other potential losses like fire, theft, severe weather damage, or hitting a deer with your car.
Yes, I understand that. But I was specifically referring to a comment made by someone else that they keep comprehensive coverage on an old vehicle solely for their windshield.
SpaethCo wrote:
Tue Oct 09, 2018 6:04 pm
I pay $100/year for comprehensive coverage with a $1000 deductible, but a $0 deductible on glass.

Collision coverage is $150/year with a $2500 deductible.

Saving $250/year doesn’t offer me enough benefit to take on the potential risk of having to make a $25-30k unexpected vehicle replacement purchase.
Collision has always made far more sense to me than comprehensive. Other than windshield repair/replacement, I only know of two people who ever filed a comprehensive claim, one who hit a turkey while doing 70 mph (actually totaled the small truck) and another who had about $5k of hail damage. But virtually everyone I know who has driven for long has had a collision claim at some point. Yes, comprehensive is usually a lot cheaper, but it still seems pricey in my experience.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: New Car: No Collision/Comprehensive?

Post by madbrain » Wed Oct 10, 2018 1:34 am

Watty wrote:
Mon Oct 08, 2018 12:09 am
When you get quotes you will likely find that this is just a small part of your insurance cost.
When is the last time you got insurance quotes ?

After my husband got 2 points on his license and we lost all our insurance discounts, the collision & comprehension shot up to 45% of the total. This is with the maximum possible $1000 deductible, and with full coverage, 500/500 liability, 100 property damage, 500/500 uninsured motorist.
The comprehensive cost is indeed small, less than 5% of total premium, but collision is 40%.
This is out of a total of $2677 for 2 cars, 18-month premium (12-month policy that got extended to expire the day before one of my husband's points goes off is records). Those are not fancy cars, but they are recent. 2015 Chevrolet Volt and 2017 Chevrolet Bolt.

I recently looked at our total cost of driving.
viewtopic.php?t=257991#p4104113

The insurance cost was a about 18% of the total costs per mile. Doing without collision or comprehensive might have shaved 5 to 8% in insurance premiums, but would have increased repair costs by nearly as much.

jheez
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Re: New Car: No Collision/Comprehensive?

Post by jheez » Wed Oct 10, 2018 7:57 am

If you can afford to self insure, you probably have the money to pay the extra insurance cost. At that point, your time is probably best spent doing something else other than dealing with another person's insurance company in the case of an accident.

UALflyer
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Re: New Car: No Collision/Comprehensive?

Post by UALflyer » Wed Oct 10, 2018 8:22 am

B4Xt3r wrote:
Mon Oct 08, 2018 6:21 am
My opinion is that insurance is only needed when you cannot afford the risk. If you can, why pay insurance companies for a service you can already afford yourself? Seems wasteful unless the mental satisfaction you derive from being insured is worth the premium.
People get way too carried away thinking that they'll save money by eliminating insurance coverage. In calculating premiums, insurance companies have to use averages and their own, internal loss histories, but in a lot of cases their premium calculations and internal loss histories do not accurately represent your individual risk. It can cut both ways, as insurance companies both overprice and underprice individual risks all the time. This is the very reason, for instance, that it's quite common for one insurance company's premiums to be several times as high as another company's premiums for the exact same coverage for the same individual. This is also the reason that while insurance companies do take your annual mileage into account, you just aren't going to save 99% of your premiums by driving 1 mile a year (or 1K miles a year) versus 12K miles a year.

To me, the decision has very little to do with whether I am able to absorb the loss, and a lot more to do with the cost of coverage, versus the probable amount of the payout and the likelihood that a claim would need to be made. For instance, if the coverage costs you $100/year and, after accounting for the deductible, the likely payout can be reasonably expected to be somewhere in the $3,000 range, just one such claim in the next 30 years would cause you to break even or to come out ahead. So, although insurance wouldn't be "necessary" in this situation, it'd be dumb not to have it.

This isn't that different from other situations. For instance, on average banks make money on credit cards. Does this mean that even if you pay off your credit card in full every month, you should be foregoing a cashback credit card? Of course not, and it'd be dumb to do that. Insurance works very similarly, so, my recommendation is to worry a lot less about all the different ways that insurance companies make money, and a lot more about your individual numbers.

CRTR
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Re: New Car: No Collision/Comprehensive?

Post by CRTR » Wed Oct 10, 2018 8:40 am

KEEP IT!!

I was in an accident a few months ago. My car sustained ~$5000 in damage. I believed it was the other driver's fault. Her (USAA) insurance adjuster tried to blame me. My adjuster agreed with me. The two companies went back and forth and the most USAA would agree to was 50/50. Ultimately, the claim was submitted to an arbitrator. When the dust settled, the other driver was deemed 100% responsible. What a hassle!!

I can't imagine going through all that hassle by myself. So, without the coverage, I would have had to hire an attorney or just eat the $5000 repair bill.

I used to think I could do without it but the above experience changed my perspective. The real benefit of C/C coverage is not so much for repairing my vehicle but having the insurance company deal with all the hassle.

UALflyer
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Re: New Car: No Collision/Comprehensive?

Post by UALflyer » Wed Oct 10, 2018 8:43 am

gasdoc wrote:
Mon Oct 08, 2018 8:55 pm
I have had two cars repaired using insurance coverage. Both were unsatisfactory in that the insurer dictated the use of parts that proved to be unacceptable, causing long delays in getting the cars back.
This can certainly happen. If you have rental car coverage on your policy, as you should, these delays are annoying, but the financial impact of these issues falls on the insurance companies, as they're the ones paying for your rental car.

Alternatively, you could have just told the bodyshop to use OEM parts and to bill you for the difference, which is exactly what you presumably do now that you don't have comprehensive and collision coverage. Another option is to use one of the insurance companies that contractually guarantee OEM parts.
I no longer carry collision insurance on any of our three cars and now getting cars repaired is a simple process- take it for an estimate, choose the provider, get the cat fixed.
It's only a simple process if it's clearly your fault. What do you do if fault is disputed? If it could be another party's fault, you'll have to wait for the other party's insurance company to complete its investigation. Depending on the situation (particularly if the other driver is not cooperating), this could take a while. If you tell your bodyshop to start the repair process before liability is determined, you risk not being reimbursed in full for the cost of the repairs.

Also, if liability is disputed, how do you decide what shop to use and what parts? If it's your fault and you're paying out of pocket, you may decide to save some money and take it to an independent shop and to use used/aftermarket parts. If it's another driver's fault and his/her insurance company is paying, you'll probably want to take it to the dealer or to a manufacturer's authorized repair shop, and may be able to get the insurance company to pay for OEM parts. Also, if insurance is paying, you'll get a rental car, so that you have something to drive while your car is in the shop. If you don't know if the other driver's insurance company is paying, and you don't have your own rental car coverage on your policy, how do you decide whether to get a rental car?

All these decisions are significantly easier if you have collision/comprehensive coverage, so that you are not at the mercy of the other driver's insurance company and don't have to worry about its claims settlement practices.
Last edited by UALflyer on Wed Oct 10, 2018 10:13 am, edited 2 times in total.

UALflyer
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Re: New Car: No Collision/Comprehensive?

Post by UALflyer » Wed Oct 10, 2018 9:17 am

willthrill81 wrote:
Tue Oct 09, 2018 1:04 pm
123 wrote:
Sun Oct 07, 2018 9:36 pm
Some people might assume that they can easily cover replacement costs of their vehicle. However what if the same thing happens again in 1 month with the replacement vehicle they purchased themselves?
That's a good point that I hadn't considered before.

However, the likelihood of having two vehicles totaled and being at fault for both is surely very slim unless you regularly drive inebriated or something along those lines.
Prior to the first collision, the likelihood of two back to back collisions severe enough to total two vehicles is much lower than the likelihood of having one such collision. Once you've had that first collision, however, and have totaled your car, the likelihood of the second collision is the same or higher than that of the first. In other words, it's not like the occurrence of the first such collision would somehow reduce or eliminate your chances of another collision.

So, if you decide not to carry collision and comprehensive coverage on your car, which is then totaled, what are you going to do with respect to the insurance coverage on your second car? At that point, the risk of loss to your replacement vehicle will be the same or higher.

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willthrill81
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Re: New Car: No Collision/Comprehensive?

Post by willthrill81 » Wed Oct 10, 2018 9:59 am

UALflyer wrote:
Wed Oct 10, 2018 9:17 am
willthrill81 wrote:
Tue Oct 09, 2018 1:04 pm
123 wrote:
Sun Oct 07, 2018 9:36 pm
Some people might assume that they can easily cover replacement costs of their vehicle. However what if the same thing happens again in 1 month with the replacement vehicle they purchased themselves?
That's a good point that I hadn't considered before.

However, the likelihood of having two vehicles totaled and being at fault for both is surely very slim unless you regularly drive inebriated or something along those lines.
Prior to the first collision, the likelihood of two back to back collisions severe enough to total two vehicles is much lower than the likelihood of having one such collision. Once you've had that first collision, however, and have totaled your car, the likelihood of the second collision is the same or higher than that of the first. In other words, it's not like the occurrence of the first such collision would somehow reduce or eliminate your chances of another collision.

So, if you decide not to carry collision and comprehensive coverage on your car, which is then totaled, what are you going to do with respect to the insurance coverage on your second car? At that point, the risk of loss to your replacement vehicle will be the same or higher.
True, but before any accident occurs, the likelihood of two consecutive vehicle totaling accidents is probably tiny.

If one had no insurance and that first totaling did happen, the individual could then evaluate whether it made sense to purchase insurance coverage going forward. And the cost will surely be higher going forward since they have already totaled one vehicle recently, but having an existing policy isn't going to give you much of a break in that regard either.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

LiterallyIronic
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Re: New Car: No Collision/Comprehensive?

Post by LiterallyIronic » Wed Oct 10, 2018 10:03 am

I'm as cheap as they come. I carry state minimum coverage on my sub-$1000 clunker.

However, if I had an expensive car - and someday I'd like to own a DeLorean, which runs about $30k - I would absolutely have comp/coll/under-insured/uninsured coverage. I'd have all the coverages possible. And I'd built a carport to park it in. And I'd carry around a car cover to keep it covered wherever I parked it.

So my vote would be to carry comp and coll.

IowaFarmBoy
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Re: New Car: No Collision/Comprehensive?

Post by IowaFarmBoy » Wed Oct 10, 2018 12:59 pm

LiterallyIronic wrote:
Wed Oct 10, 2018 10:03 am
I'm as cheap as they come. I carry state minimum coverage on my sub-$1000 clunker.
If you really have state minimum liability....

State minimum is generally only liability and at very low limits. For example, here in Illinois, the state limits are 20/40/15 which means $20k max bodily injury per person, a total of $40k bodily injury for everyone injured in an accident and $15k for property damage. You are leaving yourself dangerously exposed to lawsuits with limits this low. It wouldn't take much of an accident to blow past these limits.

I agree it makes sense to skip comp and collision on a sub $1000 car.

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dm200
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Re: New Car: No Collision/Comprehensive?

Post by dm200 » Wed Oct 10, 2018 1:00 pm

IowaFarmBoy wrote:
Wed Oct 10, 2018 12:59 pm
LiterallyIronic wrote:
Wed Oct 10, 2018 10:03 am
I'm as cheap as they come. I carry state minimum coverage on my sub-$1000 clunker.
If you really have state minimum liability....

State minimum is generally only liability and at very low limits. For example, here in Illinois, the state limits are 20/40/15 which means $20k max bodily injury per person, a total of $40k bodily injury for everyone injured in an accident and $15k for property damage. You are leaving yourself dangerously exposed to lawsuits with limits this low. It wouldn't take much of an accident to blow past these limits.

I agree it makes sense to skip comp and collision on a sub $1000 car.
yes -- taking on too much risk, in my opinion.

TheAccountant
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Re: New Car: No Collision/Comprehensive?

Post by TheAccountant » Wed Oct 10, 2018 1:56 pm

Very foolish move.

criticalmass
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Re: New Car: No Collision/Comprehensive?

Post by criticalmass » Wed Oct 10, 2018 10:43 pm

LiterallyIronic wrote:
Wed Oct 10, 2018 10:03 am
I'm as cheap as they come. I carry state minimum coverage on my sub-$1000 clunker.

However, if I had an expensive car - and someday I'd like to own a DeLorean, which runs about $30k - I would absolutely have comp/coll/under-insured/uninsured coverage. I'd have all the coverages possible. And I'd built a carport to park it in. And I'd carry around a car cover to keep it covered wherever I parked it.

So my vote would be to carry comp and coll.
If your clunker is involved in an accident involving injury, such as kid on bicycle, do you have sufficient insurance to pay emergency room plus hospital plus lawsuit?

skis4hire
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Re: New Car: No Collision/Comprehensive?

Post by skis4hire » Thu Oct 11, 2018 1:25 am

I think the main thing is to shop around. I've found vastly different prices between carriers, and also between markets with the same carrier. I had Geico, and when I moved to another state, their new quote increased by 2-3x. I found I could roughly match my old rate by switching to Progressive. I've had good service from both companies.

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willthrill81
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Re: New Car: No Collision/Comprehensive?

Post by willthrill81 » Thu Oct 11, 2018 11:34 am

criticalmass wrote:
Wed Oct 10, 2018 10:43 pm
LiterallyIronic wrote:
Wed Oct 10, 2018 10:03 am
I'm as cheap as they come. I carry state minimum coverage on my sub-$1000 clunker.

However, if I had an expensive car - and someday I'd like to own a DeLorean, which runs about $30k - I would absolutely have comp/coll/under-insured/uninsured coverage. I'd have all the coverages possible. And I'd built a carport to park it in. And I'd carry around a car cover to keep it covered wherever I parked it.

So my vote would be to carry comp and coll.
If your clunker is involved in an accident involving injury, such as kid on bicycle, do you have sufficient insurance to pay emergency room plus hospital plus lawsuit?
I can definitely see someone passing up on comprehensive, collision, towing, etc. But liability and, to a lesser somewhat extent, uninsured/underinsured coverage is a must for everyone. Case in point, we collided with another vehicle a couple of years ago, and it was deemed to be the other driver's fault. He had no coverage and wasn't the owner of the vehicle, and the vehicle's owner had no coverage either. We were only out $100 for the deductible on our vehicle (almost $5k of damage to our vehicle), which the other driver was later forced to reimburse us for. And liability is an absolute no-brainer.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

LiterallyIronic
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Re: New Car: No Collision/Comprehensive?

Post by LiterallyIronic » Thu Oct 11, 2018 12:04 pm

criticalmass wrote:
Wed Oct 10, 2018 10:43 pm
LiterallyIronic wrote:
Wed Oct 10, 2018 10:03 am
I'm as cheap as they come. I carry state minimum coverage on my sub-$1000 clunker.

However, if I had an expensive car - and someday I'd like to own a DeLorean, which runs about $30k - I would absolutely have comp/coll/under-insured/uninsured coverage. I'd have all the coverages possible. And I'd built a carport to park it in. And I'd carry around a car cover to keep it covered wherever I parked it.

So my vote would be to carry comp and coll.
If your clunker is involved in an accident involving injury, such as kid on bicycle, do you have sufficient insurance to pay emergency room plus hospital plus lawsuit?
I don't know what standing they'd have for a lawsuit beyond the emergency room and hospital you already mentioned, but I have $25k liability per person per accident. Given your scenario of hitting a kid on a bicycle, then I must be driving around the neighborhood, meaning that I'm going no faster than 25mph (less if I see the kid and have time to break somewhat before the collision). Ergo, I feel comfortable that the bill would be under $25k in most cases and paying out of pocket for excess, if any. And if the excess was too high, I consider myself fairly judgment-proof. Utah has the Homestead Exemption, which allows me to exempt $30,000 in home equity from Bankruptcy (assuming Chapter 7), and my retirement accounts are also exempt. So, absolutely worst case scenario, I declare Chapter 7, and the maximum I'd have to pay is my amount of home equity (about $60,000) minus the $30,000 exemption, for a total of $30,000, which I'd pull out of my Roth IRA and pay the kid's family and then go on with my life.

I'm comfortable taking those odds.

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