Is this enough auto insurance coverage?

[Ws6]

Originally Posted by Mad_Hatter
Originally Posted by Ws6
Originally Posted by oilpsi2high
Originally Posted by skyactiv
My dad is a retired attorney. If you run over a kid on a bicycle, you'd wish you lived in a house instead of renting, trust me.


Shouldn't this be the other way around?

No, because they cannot garnish a primary residence, but they can garnish 20% of your wages, after the judge reviews your living expenses, which means that you ain't NEVER gone get anything but a mud hut.

If you're that screwed because of a judgement stemming from an accident, just file bankruptcy. Unless you were under the influence or found willfully negligent, like intentionally running someone over, you can discharge BOTH personal injury and property damage awards.. unless the harmed party is the federal govt., debts owed to the federal govt are not dischargeable via Ch. 7.



...or you could have a legit policy for about $20/mo more than state minimums with comp. At least, that's how mine shakes out.

 

[Mad_Hatter]

Originally Posted by Ws6

...or you could have a legit policy for about $20/mo more than state minimums with comp. At least, that's how mine shakes out.

Does that $20 include the added cost to up your premium to satisfy your umbrella policy deductible? Many UP's have a deductible that must be met before they pay out..I would presume your agent did this.

You're free to purchase whatever you want but a ethical agent has a responsibility to tell you whether or not a umbrella policy makes sense for you.

For example (from a popular insurer)
Quote
Example that does not need an umbrella policy: You drive a $27,000 Jeep, earn $65,000 a year, are married with a non-working spouse, have no children, do not own a house, have $8,000 in credit card debt, and are worth a combined total of $60,000. At the age of 27, your vehicle is a blight on your finances because of the cost. All that money spent paying the monthly payments could go towards a downpayment on a house, or investments in the stock market. You still feel young and invincible with an attitude that you can work forever!

Assessment: You are a risk taker because you're putting your life in harm's way with poor financial habits. As a result, you will likely never amass a net worth even close to $1 million. This is great because you therefore don't need an umbrella policy. Your expensive comprehensive auto insurance policy which acts as a lead balloon on your net worth will do."

All I'm saying is some people may be best off putting that $20 into an (Roth)IRA every month rather than an umbrella policy, especially if they live in a State where it can't be garnished to satisfy a judgement. And if it's a Roth IRA you can withdraw your principle at any time for any reason without penalty because you've already paid taxes on it. So you can use it as a rainy day fund that is shielded from a public debt ...(-State dependent. Your IRA can be used to satisfy a support order for alimony or child support)

 

[MoneyJohn]

Thank you, everyone, for the comments.

Those who said this is expensive and I should shop around, this is the cheapest I can get. The wife has 2 crashes (just vehicle damage, no bodily injury) under her belt in the last 10 years. While none of them really count anymore, they are on the record. Plus, we live pretty close to NYC. NYC is not known for careful drivers so probably that increases the risk of a crash and gets added to the cost.

I can get Geico, All-State etc for cheap but with the horror stories I have heard, I do not want to skimp there. I am yet to hear a horror story with Erie. My mantra is, what good is insurance if it doesn't help when you need it. So I will pay if I am going to sleep peacefully at night. Life has been a royal roller coaster for the last decade (hence no assets). I REALLY want some peace in life.

Originally Posted by demarpaint
I'm not sure if they can take IRA money, that might vary by state, it would be something worth looking into.

@demarpaint, Thanks for the pointer. I will run this by the agent and see what she says

Originally Posted by Fawteen
Personally I'd drop the collision on the 2006 Sentra. It's not worth paying that much to insure and it has very little value.

@Fawteen, I have heard people saying drop comprehensive but not collision. What will cover the cost of repairing another car if I drop collision?
I asked about dropping comprehensive last year, but the agent asked if the car is to get totaled tomorrow, am I willing to get another car in short time? The answer is, I can but I don't want to. We paid off Forester yesterday and don't want to start another payment for 5 years at least.

Originally Posted by WhyMe
you need to sit down and calculate how much assets you have and decide from there.

@WhyMe, I don't have any assets (other than IRA). Whatever I had, everything was wiped out in the last 8 years due to the medical bills.

Originally Posted by Wolf359
At $100 for roadside assistance, I'd rather just get AAA. I think roadside from the insurance company is limited and some people claim that it's considered a claim when you use it.

@Wolf359, thanks for the pointer. I have been thinking about that too. Only once I had to use the roadside assistance, Erie cut me a check for the cost of towing (~$150), but don't know if it was considered as a claim.

Originally Posted by thooks
In most states, umbrellas are not generally discoverable. Meaning you don't have to disclose it and your insurance carrier doesn't have to tell.

@thooks, I didn't quite understand about disclosure of an umbrella policy. If I get one, it will be with Erie.

Originally Posted by Ws6
Also, am I reading you can only drive well under 20K miles per year, combined between vehicles? What happens when you go over?

@Ws6, We have a good buffer with the mileage. We rarely drive 8500 miles. With that calculation, our Forester mileage should be 42500 but it is 33000. So even if we go above 8500 one year, they wouldn't know as they have never asked our mileage, if this is what you are asking.

Originally Posted by Mad_Hatter

OP.. you say you have no assets (aside from your IRA) but you're looking into an umbrella policy, why? Just up your liability limits.

All I'm saying is some people may be best off putting that $20 into an (Roth)IRA every month rather than an umbrella policy, especially if they live in a State where it can't be garnished to satisfy a judgement.

@Mad_Hatter, You got that right. Just want to have enough buffer with regards to liability, should something go wrong. As I said earlier, it has been a remarkably stressful decade in terms of finances, due to the medical bills. I can't afford to lose any money to liability. Want to invest that money in rebuilding what I lost to the medical bills.
I never share our policy details with any agent but I noticed, the moment, they enter our information in their database, all info (except the amount we pay) appears without them knowing anything. A StateFarm guy mentioned that there is a central database that everyone enters the info and is available to other companies.
Thank you for posting the example of the umbrella policyholder. I get where you are coming from and would like to know more. May I contact you via PM?

Thank you, everyone, for all comments. I wasn't too sure how to proceed but now I have enough food for thought.

 

[Mad_Hatter]

Originally Posted by MoneyJohn

Thank you for posting the example of the umbrella policyholder. I get where you are coming from and would like to know more. May I contact you via PM?

Sure thing. But know that I'm not an attorney or cfp, but just a regular Joe that's managed to pick up a few things along way......but yeah, if I can help..ask away.

And yes, there is a database maintained by the industry and NAIC I believe. Healthcare is the same. In theory it's set up to prevent double coverage... but insurers can use it to "rate" you (along with your credit score). So the accidents the wife has had, any potential insurer can find out about them...but usually after 10yrs accidents and tickets "fall off" so I'd be surprised if Erie is still rating your household but who knows. It sounds like you're smart enough to have shopped around so I trust your judgment. I bet the proximity to NYC is a big factor.

I feel you on the dropping comprehensive thing.. your agent makes a valid point and only you know if it makes sense financially to drop it... given your finances and need for peace of mind i don't begrudge you for keeping. Maybe later on when things improve for ya that might make more sense to you. Insurance is def one of those things I hate paying (who doesn't, right?) but knowing I have it helps me sleep better at night.

 

[Hall]

Originally Posted by Ws6
Also, am I reading you can only drive well under 20K miles per year, combined between vehicles? What happens when you go over?

Nothing happens. They don't ask for your current mileage so they have no baseline to know how many miles you drive per year. They're primarily concerned with high mileage that might occur from folks that are using their personal vehicles as "work" vehicles, i.e. making deliveries, Uber'ing, and so on.

 

[Wolf359]

Originally Posted by MoneyJohn

Originally Posted by Fawteen
Personally I'd drop the collision on the 2006 Sentra. It's not worth paying that much to insure and it has very little value.

@Fawteen, I have heard people saying drop comprehensive but not collision. What will cover the cost of repairing another car if I drop collision?
I asked about dropping comprehensive last year, but the agent asked if the car is to get totaled tomorrow, am I willing to get another car in short time? The answer is, I can but I don't want to. We paid off Forester yesterday and don't want to start another payment for 5 years at least.

Originally Posted by thooks
In most states, umbrellas are not generally discoverable. Meaning you don't have to disclose it and your insurance carrier doesn't have to tell.

@thooks, I didn't quite understand about disclosure of an umbrella policy. If I get one, it will be with Erie.


If you're going to drop one, I'd drop collision before I'd drop comprehensive in that order. If you can't afford to drop collision, then I wouldn't drop comprehensive either. Covers things like fire and theft. Around here in the city, things like windows tend to get broken, either door glass, windshield or back windshield. Also covers fire and theft. Just heard of one where city rats chewed up the wires in someones car and the insurance company totaled it out on their comprehensive policy. With hurricane season here, I've also heard of people getting their cars hit with tree branches. Also covered under comprehensive and of course flooding would be too.

Disclosure about the umbrella is basically for negotiating purposes. Maybe they'll only go after you for 300k or be willing to settle for 300k if they don't know about the umbrella. Otherwise they go for the highest amount.

 

[Schmoe]

Currently in same boat myself. State Farm...100/300/100...only the truck has liability, if some of ya'll remember I brought this up on a previous post. I'm paying 139.18 a month for all the vehicles below with full coverage except truck. That includes underinsured/uninsured motorist also for all vehicles and road side assistance on all except the two newest Honda's....have Hondacare on that for the time being. In order for me to get 1M umbrella, I'd have to jump to 250/500/250 coverage. Surprised, that umbrella policy would only be 200 a year, also includes my house, which SF has too.

 

[Mad_Hatter]

You also have to factor in the cost difference going from 100/300/100 to 250/500/250... For what they offer they're UP's are not priced all that bad, in general.. you just have to remember the main cost is already baked into the cake of your auto/home policy once it's upped. And I'm fairly certain your UP is no good if your home/auto don't pay out or lapses.

 

[Schmoe]

Yeah, I know premiums will go up when I move up to 250/500....but with a female teenage driver starting out, I'll bite that bullet to protect myself until I feel confident that she's a good driver.....right now with her permit...not so much. But hey, we all started out that way too. I just talked with my agent and asked about that UP, she told me I'd be insured 1M over the policy, so in that case, 1.5M total.

 

[Ws6]

Originally Posted by Mad_Hatter
Originally Posted by Ws6

...or you could have a legit policy for about $20/mo more than state minimums with comp. At least, that's how mine shakes out.

Does that $20 include the added cost to up your premium to satisfy your umbrella policy deductible? Many UP's have a deductible that must be met before they pay out..I would presume your agent did this.

You're free to purchase whatever you want but a ethical agent has a responsibility to tell you whether or not a umbrella policy makes sense for you.

For example (from a popular insurer)
Quote
Example that does not need an umbrella policy: You drive a $27,000 Jeep, earn $65,000 a year, are married with a non-working spouse, have no children, do not own a house, have $8,000 in credit card debt, and are worth a combined total of $60,000. At the age of 27, your vehicle is a blight on your finances because of the cost. All that money spent paying the monthly payments could go towards a downpayment on a house, or investments in the stock market. You still feel young and invincible with an attitude that you can work forever!

Assessment: You are a risk taker because you're putting your life in harm's way with poor financial habits. As a result, you will likely never amass a net worth even close to $1 million. This is great because you therefore don't need an umbrella policy. Your expensive comprehensive auto insurance policy which acts as a lead balloon on your net worth will do."

All I'm saying is some people may be best off putting that $20 into an (Roth)IRA every month rather than an umbrella policy, especially if they live in a State where it can't be garnished to satisfy a judgement. And if it's a Roth IRA you can withdraw your principle at any time for any reason without penalty because you've already paid taxes on it. So you can use it as a rainy day fund that is shielded from a public debt ...(-State dependent. Your IRA can be used to satisfy a support order for alimony or child support)

Yeah, my policy went from about $160 to about $180/mo.

That said, what if you hit a new Audi S7? There went your $100K property damage right there...and MANY people are rolling state minimums! SCARY!

In fact, consider this...you hit some black ice, and slide into that S7, which then hits the 911GT3 in front of it. You're SOL, lol! And yes, I've seen plenty of 1/2 million dollar "stoplights" in my area. Very easy to see that amount of money parked at a light.

 

[Yah-Tah-Hey]

Originally Posted by Ws6
Originally Posted by Mad_Hatter
Originally Posted by Ws6

...or you could have a legit policy for about $20/mo more than state minimums with comp. At least, that's how mine shakes out.

Does that $20 include the added cost to up your premium to satisfy your umbrella policy deductible? Many UP's have a deductible that must be met before they pay out..I would presume your agent did this.

You're free to purchase whatever you want but a ethical agent has a responsibility to tell you whether or not a umbrella policy makes sense for you.

For example (from a popular insurer)
Quote
Example that does not need an umbrella policy: You drive a $27,000 Jeep, earn $65,000 a year, are married with a non-working spouse, have no children, do not own a house, have $8,000 in credit card debt, and are worth a combined total of $60,000. At the age of 27, your vehicle is a blight on your finances because of the cost. All that money spent paying the monthly payments could go towards a downpayment on a house, or investments in the stock market. You still feel young and invincible with an attitude that you can work forever!

Assessment: You are a risk taker because you're putting your life in harm's way with poor financial habits. As a result, you will likely never amass a net worth even close to $1 million. This is great because you therefore don't need an umbrella policy. Your expensive comprehensive auto insurance policy which acts as a lead balloon on your net worth will do."

All I'm saying is some people may be best off putting that $20 into an (Roth)IRA every month rather than an umbrella policy, especially if they live in a State where it can't be garnished to satisfy a judgement. And if it's a Roth IRA you can withdraw your principle at any time for any reason without penalty because you've already paid taxes on it. So you can use it as a rainy day fund that is shielded from a public debt ...(-State dependent. Your IRA can be used to satisfy a support order for alimony or child support)

Yeah, my policy went from about $160 to about $180/mo.

That said, what if you hit a new Audi S7? There went your $100K property damage right there...and MANY people are rolling state minimums! SCARY!

In fact, consider this...you hit some black ice, and slide into that S7, which then hits the 911GT3 in front of it. You're SOL, lol! And yes, I've seen plenty of 1/2 million dollar "stoplights" in my area. Very easy to see that amount of money parked at a light.
Or collide with a school bus or over the road coach with 40 seniors on their way to a reservation casino.

 

[Ws6]

Originally Posted by Yah-Tah-Hey
Originally Posted by Ws6
Originally Posted by Mad_Hatter
Originally Posted by Ws6

...or you could have a legit policy for about $20/mo more than state minimums with comp. At least, that's how mine shakes out.

Does that $20 include the added cost to up your premium to satisfy your umbrella policy deductible? Many UP's have a deductible that must be met before they pay out..I would presume your agent did this.

You're free to purchase whatever you want but a ethical agent has a responsibility to tell you whether or not a umbrella policy makes sense for you.

For example (from a popular insurer)
Quote
Example that does not need an umbrella policy: You drive a $27,000 Jeep, earn $65,000 a year, are married with a non-working spouse, have no children, do not own a house, have $8,000 in credit card debt, and are worth a combined total of $60,000. At the age of 27, your vehicle is a blight on your finances because of the cost. All that money spent paying the monthly payments could go towards a downpayment on a house, or investments in the stock market. You still feel young and invincible with an attitude that you can work forever!

Assessment: You are a risk taker because you're putting your life in harm's way with poor financial habits. As a result, you will likely never amass a net worth even close to $1 million. This is great because you therefore don't need an umbrella policy. Your expensive comprehensive auto insurance policy which acts as a lead balloon on your net worth will do."

All I'm saying is some people may be best off putting that $20 into an (Roth)IRA every month rather than an umbrella policy, especially if they live in a State where it can't be garnished to satisfy a judgement. And if it's a Roth IRA you can withdraw your principle at any time for any reason without penalty because you've already paid taxes on it. So you can use it as a rainy day fund that is shielded from a public debt ...(-State dependent. Your IRA can be used to satisfy a support order for alimony or child support)

Yeah, my policy went from about $160 to about $180/mo.

That said, what if you hit a new Audi S7? There went your $100K property damage right there...and MANY people are rolling state minimums! SCARY!

In fact, consider this...you hit some black ice, and slide into that S7, which then hits the 911GT3 in front of it. You're SOL, lol! And yes, I've seen plenty of 1/2 million dollar "stoplights" in my area. Very easy to see that amount of money parked at a light.
Or collide with a school bus or over the road coach with 40 seniors on their way to a reservation casino.

Yup. It could happen. Cheap insurance, and I also rolled my professional liability right on in there with it...doesn't show up in court under my license, and yet it's safely tucked away in there. Excellent for people who have professional liability, yet don't want a lawyer to turn a professional liability policy up in a database search.

 

[MoneyJohn]

Originally Posted by Ws6

Yup. It could happen. Cheap insurance, and I also rolled my professional liability right on in there with it...doesn't show up in court under my license, and yet it's safely tucked away in there. Excellent for people who have professional liability, yet don't want a lawyer to turn a professional liability policy up in a database search.

Curious about this professional liability. I would like to know more. The wife has basic professional liability and I have always been uncomfortable about it, esp in the medical scene. May I PM you?