Drop Collision Insurance?

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Atticus713
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Drop Collision Insurance?

Post by Atticus713 » Sat Jul 25, 2020 2:17 pm

Hi Forum,
My husband (53y) and I (51y) have a 2016 Honda Odyssey and a 2016 Honda CRV that we have recently paid off. Now that we aren’t mandated to carry collision insurance, we’re wondering whether it makes economic sense to continue to carry it on cars that are 4 years old or to drop it? Also: our older son just received his Driver’s Permit and our younger son will have his in 2 years.
Thoughts? Thanks for your help!
Atticus713
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David Jay
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Re: Drop Collision Insurance?

Post by David Jay » Sat Jul 25, 2020 2:19 pm

If you are comfortable writing a check for a replacement vehicle, go ahead and drop it.

My "threshold of pain" is about $3000 or so. Until it has depreciated to that level, I usually continue to carry collision.
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Re: Drop Collision Insurance?

Post by Jack FFR1846 » Sat Jul 25, 2020 2:19 pm

With 2 sons, expect at least 2 crashes. Keep collision.

(I have 2 sons. Both are now licensed and I hope they're done crashing the cars)
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Brianmcg321
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Re: Drop Collision Insurance?

Post by Brianmcg321 » Sat Jul 25, 2020 2:23 pm

I wouldn’t drop collision unless the value of the car was under $5k.

I doubt your 2016 cars are that low in value.
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Ron Ronnerson
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Re: Drop Collision Insurance?

Post by Ron Ronnerson » Sat Jul 25, 2020 2:29 pm

David Jay wrote:
Sat Jul 25, 2020 2:19 pm
If you are comfortable writing a check for a replacement vehicle, go ahead and drop it.

My "threshold of pain" is about $3000 or so. Until it has depreciated to that level, I usually continue to carry collision.
My threshold is also right around $3k and agree that collision can be dropped once you're comfortable writing a check for a replacement. So it will vary for different people.

sport
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Re: Drop Collision Insurance?

Post by sport » Sat Jul 25, 2020 2:36 pm

One other consideration is what happens if your vehicle is damaged due to some other driver's fault. In my state, I can put in a claim with my insurance company and they will deal with the other party or their insurance company. My insurance company will pay for my damage, less the deductible. If/when they obtain payment from the other party or their insurance, they will refund the deductible to me. Without collision coverage, you are on your own trying to collect from the other party or their insurance.

jpelder
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Re: Drop Collision Insurance?

Post by jpelder » Sat Jul 25, 2020 2:39 pm

It depends on your ability to repair/replace a car if it's damaged or destroyed. It also depends on the cost of your collision insurance. My cars are much older and less expensive than yours (a 2011 Cruze and 2013 Civic), and the collision and comprehensive insurance for both is less than $300 per year. At that price, it's worth keeping until the cars are worth very little.
Of course, we're both 30-somethings with no tickets in 10 years and no at-fault wrecks ever. Your numbers may differ with teenage drivers.

One thing to remember is that collision coverage lets you file through your insurer for a wreck when you're not at fault. Then your insurer deals with the at fault party's insurance (or sues them directly if they're un/under insured). If you don't have collision coverage, you have to file through the other driver's insurance or deal with legal fees directly. That's a big benefit

Penguin
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Re: Drop Collision Insurance?

Post by Penguin » Sat Jul 25, 2020 2:42 pm

I am curious what it cost to insure 2 cars for collision with 2 underage drivers?
Jon

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Re: Drop Collision Insurance?

Post by tibbitts » Sat Jul 25, 2020 3:25 pm

Atticus713 wrote:
Sat Jul 25, 2020 2:17 pm
Hi Forum,
My husband (53y) and I (51y) have a 2016 Honda Odyssey and a 2016 Honda CRV that we have recently paid off. Now that we aren’t mandated to carry collision insurance, we’re wondering whether it makes economic sense to continue to carry it on cars that are 4 years old or to drop it? Also: our older son just received his Driver’s Permit and our younger son will have his in 2 years.
Thoughts? Thanks for your help!
Atticus713
Why would you ask this question without including the cost of collision coverage and amount of the deductible?

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Atticus713
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Re: Drop Collision Insurance?

Post by Atticus713 » Sat Jul 25, 2020 3:38 pm

Thanks to all of you for your speedy replies! They were very helpful and put things in perspective—plus, I wasn’t aware of the whole insurance company filing suit against each other dynamic. Based on your practical advice, we’ll keep the collision insurance until the car values drop to 3k-5K each. In answer to the question of what it will cost to ensure two young permit drivers, I’m not sure yet—they don’t need to be added in my state until they have their actual license. I’m sure the amount will be painful though! Thanks again Forum!
Best,
Atticus713
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mickeyd
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Re: Drop Collision Insurance?

Post by mickeyd » Sat Jul 25, 2020 6:37 pm

Drop collision coverage and save a bunch of $. Consider keeping comprehensive as it is cheaper.
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grabiner
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Re: Drop Collision Insurance?

Post by grabiner » Sun Jul 26, 2020 9:58 am

Instead of dropping coverage, you can get a good part of the savings by raising the deductible. If you have a loan, the lender might insist on a $500 deductible to protect its interests. But without a loan, you can get a $2500 deductible, pay for most damage yourself, and still have the insurance company as an advocate if you have a serious accident.
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Re: Drop Collision Insurance?

Post by Mr.BB » Sun Jul 26, 2020 10:05 am

I usually drive my cars into the ground (or until the repairs start adding up). If you can walk away from your car after an accident have it towed away to the junk pile and feel financial comfortable buying a another new or used car then you don't need the collision insurance for your car. My 2007 I drove until 2017. I dropped the collision on that car in 2014; saved a lot on insurance.
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Re: Drop Collision Insurance?

Post by balbrec2 » Sun Jul 26, 2020 2:28 pm

Brianmcg321 wrote:
Sat Jul 25, 2020 2:23 pm
I wouldn’t drop collision unless the value of the car was under $5k.

I doubt your 2016 cars are that low in value.
+1

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Kurmudjon
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Re: Drop Collision Insurance?

Post by Kurmudjon » Sun Jul 26, 2020 3:22 pm

I have made a change in recent years. I have a 4 year old car that is even now worth about 30k per KBB. My stock market holdings often change daily in the tens of thousands which tells me I can survive a30k loss pretty easily. Collision coverage no longer makes sense for me.YMMV
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whodidntante
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Re: Drop Collision Insurance?

Post by whodidntante » Sun Jul 26, 2020 3:38 pm

Kurmudjon wrote:
Sun Jul 26, 2020 3:22 pm
I have made a change in recent years. I have a 4 year old car that is even now worth about 30k per KBB. My stock market holdings often change daily in the tens of thousands which tells me I can survive a30k loss pretty easily. Collision coverage no longer makes sense for me.YMMV
R'amen to that. In order for you to be on the hook for collision damage, you have to cause the collision, or get hit by an uninsured driver who is also a financial turnip.

Also, my car sees a lot of track time which non-racing insurance will not cover. Probably will drop full coverage once the note is paid off, which I'm in no hurry to do.

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dodecahedron
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Re: Drop Collision Insurance?

Post by dodecahedron » Sun Jul 26, 2020 4:00 pm

whodidntante wrote:
Sun Jul 26, 2020 3:38 pm
Kurmudjon wrote:
Sun Jul 26, 2020 3:22 pm
I have made a change in recent years. I have a 4 year old car that is even now worth about 30k per KBB. My stock market holdings often change daily in the tens of thousands which tells me I can survive a30k loss pretty easily. Collision coverage no longer makes sense for me.YMMV
R'amen to that. In order for you to be on the hook for collision damage, you have to cause the collision, or get hit by an uninsured driver who is also a financial turnip.
Actually uninsured/underinsured motorist coverage is totally separate from collision coverage. I dropped collision and comprehensive, but retained uninsured/underinsured motorist coverage (as well as liability and personal injury projection of course.)

If I recall correctly, uninsured/underinsured motorist coverage was pretty cheap to retain (of course, my cars are old, 2003 and 2007 Honda Accords.) And uninsured/underinsured motorist coverage is actually *required* in NY can not be dropped (even if I wanted to do so, which I don´t).

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Re: Drop Collision Insurance?

Post by sport » Sun Jul 26, 2020 5:04 pm

dodecahedron wrote:
Sun Jul 26, 2020 4:00 pm
If I recall correctly, uninsured/underinsured motorist coverage was pretty cheap to retain (of course, my cars are old, 2003 and 2007 Honda Accords.) And uninsured/underinsured motorist coverage is actually *required* in NY can not be dropped (even if I wanted to do so, which I don´t).
In my state, uninsured/underinsured coverage applies only to personal injury. Damage to the vehicle is covered by collision coverage regardless of who was at fault.

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Re: Drop Collision Insurance?

Post by grabiner » Sun Jul 26, 2020 5:56 pm

sport wrote:
Sun Jul 26, 2020 5:04 pm
dodecahedron wrote:
Sun Jul 26, 2020 4:00 pm
If I recall correctly, uninsured/underinsured motorist coverage was pretty cheap to retain (of course, my cars are old, 2003 and 2007 Honda Accords.) And uninsured/underinsured motorist coverage is actually *required* in NY can not be dropped (even if I wanted to do so, which I don´t).
In my state, uninsured/underinsured coverage applies only to personal injury. Damage to the vehicle is covered by collision coverage regardless of who was at fault.
But if the other driver is at fault and has adequate insurance, you and your insurer will collect from that driver's insurance, so your insurer won't pay anything and you will get back your deductible. If you don't have collision insurance, you collect only from the at-fault driver or the driver's insurance.
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Re: Drop Collision Insurance?

Post by sport » Sun Jul 26, 2020 7:21 pm

grabiner wrote:
Sun Jul 26, 2020 5:56 pm
But if the other driver is at fault and has adequate insurance, you and your insurer will collect from that driver's insurance, so your insurer won't pay anything and you will get back your deductible. If you don't have collision insurance, you try to collect only from the at-fault driver or the driver's insurance.
That is correct. My point was that UI is only for injury in my state, not property damage. I also amended your post in red.

CT-Scott
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Re: Drop Collision Insurance?

Post by CT-Scott » Wed Jul 29, 2020 8:46 pm

A couple of people have mentioned it, but most seem to have completely ignored it...whether or not you can afford to pay for the replacement value is only one aspect to this...if you perceive there to be a much greater risk for your situation, and the cost seems low enough, it makes more sense to carry the extra coverage. And the numbers are likely not always as "obvious" as some have depicted here.

Personal example: I have a 21-year-old daughter. She's driving a high-mileage 2007 Honda CR-V that I bought for about $6000 about 2 years ago. She hasn't had an accident/claim (yet), but as a relatively young, inexperienced driver, she's more likely to get in an accident than me. I remember driving with her when she was newly-licensed, and I'm honestly pretty surprised (thankfully, so) that she didn't have an accident within the first 3 years of driving. An insurance quote I just got indicates a $183 annual premium for Collision coverage ($500 deductible) and another $56 for comprehensive w/full glass coverage ($100 deductible). That CR-V would probably get valued at no more than $3500-4000 if declared "totaled", but it still seems worth it to spend the extra $239/year ($20/month) to cover a $3000-3500 (after deductible) moderate-risk item, no?

Also, can anyone suggest the best source to use for determining a car's value, that would be closest to what an insurance company would likely value it? The KBB site asks you to give a subjective rating of the car being in Fair, Good, Very Good, or Excellent condition, and then gives you a trade-in value "range", so the low-end value for an older car in "Fair" condition vs the high-end value if rated as "Excellent" condition can be pretty wide, and if the car is demolished in an accident, how would they know what condition it was really in before the accident?

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Re: Drop Collision Insurance?

Post by inbox788 » Fri Jul 31, 2020 1:35 am

CT-Scott wrote:
Wed Jul 29, 2020 8:46 pm
That CR-V would probably get valued at no more than $3500-4000 if declared "totaled", but it still seems worth it to spend the extra $239/year ($20/month) to cover a $3000-3500 (after deductible) moderate-risk item, no?
Statistically, no. Inexperienced teens get a deserved reputation for being higher risk, but they're not that high. This implies that 1/20 teens totals a car every year. I thought the ballpark accident rate was 1% and for teens and bad drivers (those with tickets and accidents) goes up 2% and up depending on the number. Only a small fraction of the accidents are total loss. We're talking collision/comprehensive here, so the risk is very defined and limited, unlike the liability/medical that can be quite a lot more.

The older the vehicle the higher the chance an accident results in a total loss, but for 4-5 year old vehicles it's only about 10%.
Comparison by CCC of total loss frequency by vehicle age shows total loss frequency grows with the age of the vehicle....Subsequently, more of the older vehicles have repair costs that hit the total loss threshold.
https://www.cccis.com/2015/11/13/whats- ... frequency/

Guessing there are about 150M drivers out there and if you use 7 million accidents, a year, that's almost 5% a year, which is higher than I would have guessed (would have said about 2%). But hopefully, you'll only be at fault for half of them, so less than 2.5% you'll be at fault and might be able to file claim against the driver at fault in half the accidents.
https://www.iii.org/fact-statistic/fact ... way-safety
[google search comes back 227M licenced drivers, so adjust you calcs as you wish; miles driven or other usage measurement is probably a better, but harder comparison]

How much is the Comp/Collision on 2016 vehicles? Guessing in the 15-20k range. It might start to make sense to cancel around 250-500 savings or more (20k*2.5= 500; 60% of repair is for less than 30% loss vehicle value). If it costs less than 250, or so, you should keep (for 20k total value; for $3k total value, I'm guessing less than $100 goes toward paying for all the totaled vehicles in that group that year).

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Re: Drop Collision Insurance?

Post by talzara » Fri Jul 31, 2020 11:08 am

inbox788 wrote:
Fri Jul 31, 2020 1:35 am
CT-Scott wrote:
Wed Jul 29, 2020 8:46 pm
That CR-V would probably get valued at no more than $3500-4000 if declared "totaled", but it still seems worth it to spend the extra $239/year ($20/month) to cover a $3000-3500 (after deductible) moderate-risk item, no?
Statistically, no. Inexperienced teens get a deserved reputation for being higher risk, but they're not that high. This implies that 1/20 teens totals a car every year. I thought the ballpark accident rate was 1% and for teens and bad drivers (those with tickets and accidents) goes up 2% and up depending on the number. Only a small fraction of the accidents are total loss.
The accident rate is much higher. Collision insurance has a claim frequency of about 6% per year and severity of about $3,500 per claim: https://www.iii.org/fact-statistic/fact ... -insurance

Since the car is only worth $3,500, most claims will total the car. It costs the same to fix the same damage on a $3,500 car or a $35,000 car. The difference is that when the repairs add up to $3,500, the insurance company totals the $3,500 car.

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Re: Drop Collision Insurance?

Post by novemberrain » Fri Jul 31, 2020 11:11 am

Atticus713 wrote:
Sat Jul 25, 2020 2:17 pm
Hi Forum,
My husband (53y) and I (51y) have a 2016 Honda Odyssey and a 2016 Honda CRV that we have recently paid off. Now that we aren’t mandated to carry collision insurance, we’re wondering whether it makes economic sense to continue to carry it on cars that are 4 years old or to drop it? Also: our older son just received his Driver’s Permit and our younger son will have his in 2 years.
Thoughts? Thanks for your help!
Atticus713
Depends on whether you are ok with car’s getting totaled and you having to pay fully out of pocket. I don’t have collision or comprehensive on my 2016 car.

core4portfolio
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Re: Drop Collision Insurance?

Post by core4portfolio » Fri Jul 31, 2020 11:25 am

why dropping collision when insurance is actually cheaper due to less driving.
Increase deducible and keep driving
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Re: Drop Collision Insurance?

Post by inbox788 » Fri Jul 31, 2020 4:58 pm

talzara wrote:
Fri Jul 31, 2020 11:08 am
The accident rate is much higher. Collision insurance has a claim frequency of about 6% per year and severity of about $3,500 per claim: https://www.iii.org/fact-statistic/fact ... -insurance

Since the car is only worth $3,500, most claims will total the car. It costs the same to fix the same damage on a $3,500 car or a $35,000 car. The difference is that when the repairs add up to $3,500, the insurance company totals the $3,500 car.
That's pretty close to the 5% I estimated if you go to the second part of the posting. I did leave out the comprehensive portion, which isn't insignificant, roughly 25% of the collision amount. Grossly, collision is $218 and comprehensive is $55 [2018 6.11 3,574 3.02 1,833]. I assume the deductible isn't accounted for yet, so the actual cost to the insurance company is even lower. Further, if everyone is covered, then there is a duplication between collision on one side of the accident and liability on the other driver, so the cost to the insurance company is really 50% (or you can think of the premiums being 200% -- paid twice for ever accident). On average, only about $100/vehicle pays for all the collision/comprehensive damage/repair for all the accidents in a year!

Surprisingly, no. Only about 10% of newer cars and 30% of 10-15 year old cars (peak). https://www.cccis.com/2015/11/13/whats- ... frequency/

It probably has to do with folks only insuring more expensive cars when older. And the oldest cars actually fall to 25%. There some self-selection likely playing a role (most people don't insure $3500 vehicles while they do $35k vehicles). So value/price seems appropriately the determinant, not the age of car.

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Re: Drop Collision Insurance?

Post by talzara » Sat Aug 01, 2020 9:19 am

inbox788 wrote:
Fri Jul 31, 2020 4:58 pm
That's pretty close to the 5% I estimated if you go to the second part of the posting. I did leave out the comprehensive portion, which isn't insignificant, roughly 25% of the collision amount.
You did not estimate a 5% claim frequency for collision insurance in the second part of your post. You estimated 2.5%, which is much too low:
inbox788 wrote:
Fri Jul 31, 2020 1:35 am
Guessing there are about 150M drivers out there and if you use 7 million accidents, a year, that's almost 5% a year, which is higher than I would have guessed (would have said about 2%). But hopefully, you'll only be at fault for half of them, so less than 2.5% you'll be at fault and might be able to file claim against the driver at fault in half the accidents.
Collision insurance has a claim frequency of 6%, which is more than twice your 2.5% estimate.

Property damage liability has a claim frequency of 4%, which is in addition to the collision claims.

The total claim frequency for property damage is 10%.
inbox788 wrote:
Fri Jul 31, 2020 4:58 pm
Grossly, collision is $218 and comprehensive is $55 [2018 6.11 3,574 3.02 1,833]. I assume the deductible isn't accounted for yet, so the actual cost to the insurance company is even lower. Further, if everyone is covered, then there is a duplication between collision on one side of the accident and liability on the other driver, so the cost to the insurance company is really 50% (or you can think of the premiums being 200% -- paid twice for ever accident). On average, only about $100/vehicle pays for all the collision/comprehensive damage/repair for all the accidents in a year!
You keep dividing by two, but you can't do that.

The auto insurance industry does not count $0 claims. If you file both a collision claim and a liability claim, and the other party accepts fault, then your collision claim will get closed out as a $0 claim. It doesn't get counted in frequency, and it doesn't get counted in severity.

The pure premium for collision insurance is $218. After loss adjustment, overhead, and profit, the average collision premium would be about $330.

The average auto insurance premium in the United States is $1,500 a year.

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Re: Drop Collision Insurance?

Post by inbox788 » Sat Aug 01, 2020 12:04 pm

talzara wrote:
Sat Aug 01, 2020 9:19 am
You keep dividing by two, but you can't do that.

The auto insurance industry does not count $0 claims. If you file both a collision claim and a liability claim, and the other party accepts fault, then your collision claim will get closed out as a $0 claim. It doesn't get counted in frequency, and it doesn't get counted in severity.

The pure premium for collision insurance is $218. After loss adjustment, overhead, and profit, the average collision premium would be about $330.

The average auto insurance premium in the United States is $1,500 a year.
I'm dividing by 2 on the estimation that half the accidents are attributed to you and the other half to the other driver. Your collision insurance covers the collision on your car when you're at fault, while the other drivers liability property damage insurance covers the damage and repair of your car when the other driver is at fault. Is that not so?

With all the drivers that carry only liability and not collision, there may be more cases where the liability cover the repairs from collision damage (so why is one 6% vs the other 4%?). Is the overall accident rate closer to 10% or because usually 2 cars are involved, 5%? Is this related to single car accidents (2% would be scary number of telephone poles, but maybe they're just parking poles)? There's also the question of whether there is a difference in those that carry collision insurance vs. those that don't. If accidents were truly random, then the rate of accidents wouldn't differ, but is there a self selection going on where good drivers don't carry insurance, so the claim rate is higher in those that do?

[need to re-evaluate risk of single car accidents in this decision. what proportion of claims? Also, the reason we are asking this question at all is we believe we are below average risk and/or don't want to join this 6% claims pool.]

[accident rates reported vs involving insurance claim; and how are unreported accidents measured or estimated?]
30 percent of crashes go unreported - CrashStats - NHTSA
National Telephone Survey of Reported and Unreported Motor Vehicle Crashes
https://crashstats.nhtsa.dot.gov/Api/Pu ... ion/812183

I see where I may be confusing accident risk and costs with the auto industry 6% claim frequency on collision insurance and looking at total accident rates and costs aren't comparing the same thing. There are accidents that don't lead to claims on collision insurance or don't involve insurance at all. On the liability side, there's $149 [3.89 3,841]. How much of that is cars vs telephone poles? I'm assuming its mostly cars.

While there should be some similarity, there are different sources of data that don't select the same groups of drivers. Claims on collision (question being asked here) vs property damage (mostly required) and risks from reported accidents (not all accidents are reported or lead to claims) leading to risk estimates such as "6.7 vehicles involved in reported accidents per million miles for all vehicles in New York City". I don't know where to get similar data for my neighborhood to prove it, but I would expect it's lower, which may explain why my expectations of accident rates is lower than averages and why I'm underestimating averages. YMMV

http://www.schallerconsult.com/taxi/crash06.htm
Average Annual Miles per Driver by Age Group

Age Male Female Total
16-19 8,206 6,873 7,624
https://www.fhwa.dot.gov/ohim/onh00/bar8.htm
Wow, that's surprisingly high! Where are all these teen driving to more than 20 miles each and every day? (I would think most teens are weekend drivers an even those driving to school are usually less than 5 miles away). [Population density varies]

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Re: Drop Collision Insurance?

Post by michaelingp » Sat Aug 01, 2020 1:53 pm

I don't think anyone mentioned rental cars yet. If you don't have collision on any of your cars (at least with my insurance company), you don't have insurance on a rental car through your insurance. In my case, because of this, I added collision to my 16 y.o. CR-V with $500 deductible. The semi-annual premium was something like $37, much less than getting insurance from the rental company. You can look at your credit card to see if it has some rental insurance, but mine had too many caveats for me to be comfortable with it.

Interestingly, I have two different insurance companies for my car and my van. I had collision on the van, but that insurance company said they would not cover a rental of an automobile since it was not a "similar" vehicle to what they were insuring. I have no idea if that was legit or not, but again, for the $37 premium, I just paid it.

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Re: Drop Collision Insurance?

Post by CurlyDave » Sat Aug 01, 2020 2:26 pm

grabiner wrote:
Sun Jul 26, 2020 5:56 pm
sport wrote:
Sun Jul 26, 2020 5:04 pm
dodecahedron wrote:
Sun Jul 26, 2020 4:00 pm
If I recall correctly, uninsured/underinsured motorist coverage was pretty cheap to retain (of course, my cars are old, 2003 and 2007 Honda Accords.) And uninsured/underinsured motorist coverage is actually *required* in NY can not be dropped (even if I wanted to do so, which I don´t).
In my state, uninsured/underinsured coverage applies only to personal injury. Damage to the vehicle is covered by collision coverage regardless of who was at fault.
But if the other driver is at fault and has adequate insurance, you and your insurer will collect from that driver's insurance, so your insurer won't pay anything and you will get back your deductible. If you don't have collision insurance, you collect only from the at-fault driver or the driver's insurance.
My experience has been that an at-fault driver's insurance company will try to lowball you at every turn. They will not do this to your insurance company who has much more experience than you and a legal staff to back them up.

Also, your collision coverage may cover you in rental cars.

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William Million
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Re: Drop Collision Insurance?

Post by William Million » Sat Aug 01, 2020 2:37 pm

Not a question of the value of the vehicle, in my opinion, but a question of the value of the vehicles relative to your net worth. If it's a good deal for the insurance company to insure you, then it's a good deal for you to insure yourself - provided you can pay the repairs (or for the replacement vehicle) out of pocket without enduring any hardship or discomfort.

Several companies, and even the US Government, self-insure their vehicles under this principle.

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Re: Drop Collision Insurance?

Post by talzara » Sat Aug 01, 2020 2:52 pm

inbox788 wrote:
Sat Aug 01, 2020 12:04 pm
I'm dividing by 2 on the estimation that half the accidents are attributed to you and the other half to the other driver. Your collision insurance covers the collision on your car when you're at fault, while the other drivers liability property damage insurance covers the damage and repair of your car when the other driver is at fault. Is that not so?
That's already accounted for in the claims statistics. Claims paid by the other driver's insurance company are not counted as collision claims. Even if the other driver's coverage limits are too low, that would be an underinsured motorist claim, not a collision claim.

inbox788
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Re: Drop Collision Insurance?

Post by inbox788 » Sat Aug 01, 2020 4:01 pm

talzara wrote:
Sat Aug 01, 2020 2:52 pm
inbox788 wrote:
Sat Aug 01, 2020 12:04 pm
I'm dividing by 2 on the estimation that half the accidents are attributed to you and the other half to the other driver. Your collision insurance covers the collision on your car when you're at fault, while the other drivers liability property damage insurance covers the damage and repair of your car when the other driver is at fault. Is that not so?
That's already accounted for in the claims statistics. Claims paid by the other driver's insurance company are not counted as collision claims. Even if the other driver's coverage limits are too low, that would be an underinsured motorist claim, not a collision claim.
Did you read the part about 4% property damage liability? I think that's a large part of the other half, and since you mentioned it, you can add to that the uninsured/underinsured premiums that are helping to pay for all the collision damage.

I understand you're only counting policies and only collision claims. It's different when you count cars or accidents and include other coverage.

We may be underestimating the single driver risk for collisions with telephone poles, parking poles, trees and other stationary objects that run into us.

"The telephone pole was approaching fast. I was attempting to swerve out of its path when it struck my front end."
http://rinkworks.com/said/insurance.shtml

I'm beginning to think the risk pool that has 6% claims is higher risk than the average driver and location. Drivers with lower than average risks and/or those living in areas where accident rates are lower (generally less dense areas) drop first when they're charged higher than average costs plus overhead or should be dropping. If you have teen drivers, assume they're higher than average risk, so if you're getting close to average rates, it might be good to keep it (also considering other factors), but chances are they'll be charged higher than average premiums.

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