When do you drop collision insurance?

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Doog

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Ok have 2 kids cars...both over 100k miles. Lots of dings as both were high school/ college cars. One has a trade in value of $5000 the other $7500. SO pretty much any accident is going to probably total them. Comprehensive/collision coverage is about 40% of the insurance premium. ($800 year for both in savings if dropped). (BTW both are in excellent mechanical condition)

Would you drop the coverage and just go with liability?
 
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Insurance company won't give you extra for taking care of the car--they go by whatever fair market value is. If it's dinged up, the market doesn't care as much. You may be paying for one expectation but apt to get something far less than you expect.

I'd say the $5k vehicle is probably time to drop. The $7,500 one, it might be worth keeping for a bit longer. Really comes down to, if you were to total out the car, how easily can you replace it? If it were to be a hardship, carrying the insurance longer may make sense. OTOH, if you already are prepared to replace, then pocket the savings.
 
Originally Posted By: supton
Insurance company won't give you extra for taking care of the car--they go by whatever fair market value is. If it's dinged up, the market doesn't care as much. You may be paying for one expectation but apt to get something far less than you expect.

I'd say the $5k vehicle is probably time to drop. The $7,500 one, it might be worth keeping for a bit longer. Really comes down to, if you were to total out the car, how easily can you replace it? If it were to be a hardship, carrying the insurance longer may make sense. OTOH, if you already are prepared to replace, then pocket the savings.


+1
 
Originally Posted By: supton
Insurance company won't give you extra for taking care of the car


Are you making stuff up?

FXPsBjh.jpg
 
I just dropped comprehensive on my 3 year old car, basically i figured i don't really care if the car gets dents and dings anymore since there's already some and if it gets major damage i can afford to pay for the repairs myself...plus i'm also betting that i'm less likely to damage my own car.
 
It comes down to how often you have an accident. If you've avoided them your whole life then maybe you can drop one or both collisions. My son dropped his collision on a $2,000 car where he had just spent $2,000 on a new engine. That was on the advice of his insurance agent (ie the car wasn't "worth anything" to them). Well, the vehicle got totaled when it slid down a hill in snow storm after being parked. He didn't have the money to fix the car or buy another one outright.

I've always driven used cars. And I've never dropped the collision until the vehicles were e worth act of nature in the next 3-5 years. My insurance comes to around $200-$250/yr for the collision coverage. My track record over the past 40 years suggests I keep the collision on until the car as long as it is drivable and road-worthy.

Your 2 cars at $400/yr coll coverage would run out to 12-18 years at current value. If you think a significant accident is more than 50% likely to occur in that time frame, I'd keep the coverage until the cars were worth a fraction of current value.
 
Originally Posted By: Ethan1
Originally Posted By: supton
Insurance company won't give you extra for taking care of the car


Are you making stuff up?

FXPsBjh.jpg


So if you vac and wash every week they'll pay extra?

Not buying it, not when so many complain about being lowballed on payoff. I have not dealt with totaling out a vehicle but I've never heard of anyone getting extra money for any recent work.
 
I've seen that list shown by Ethan before. It is likely more focused on bidding from local salvage companies than for settling a claim.
 
A factor to consider if you are borderline dropping coverage. If you are in an accident that isn't your fault, if you have collision coverage, your company is a better advocate for you against the opposing company. They have skin in the game. If you don't have collision coverage, they don't care and you are on your own.

Just an observation based on my experience. This is a factor that doesn't show up on any formula balancing risk vs value of car.
 
In 2012 my beater 1991 accord was t-boned at a four way stop by a non attentive driver. Their insurance company paid for my beater and handsomely after it was totalled. I got $2300 for the car that was worth prolly $1400 at the time. I didn't have comprehensive coverage either.

3.5 yrs later they settled for $18K for medical claims. I got 5500 of that and it wasn't easy to say the least.
 
A co worker bought a Dodge truck for $10K and it got totaled. He had only liability insurance on it.
I asked why no collision insurance ?
He said I paid cash for it and didn't need to buy it.Really????? He is just a working guy and borrowed the $10K from his Dad. He never thought to protect himself and his Dad.
 
Originally Posted By: Ethan1
Are you making stuff up?


Originally Posted By: supton
I have not dealt with totaling out a vehicle


So you don't have any firsthand knowledge of how this process works, but you're going to post about it anyway. I see a lot of this on BITOG.
35.gif
 
Originally Posted By: Ethan1
Originally Posted By: Ethan1
Are you making stuff up?


Originally Posted By: supton
I have not dealt with totaling out a vehicle


So you don't have any firsthand knowledge of how this process works, but you're going to post about it anyway. I see a lot of this on BITOG.
35.gif



Here's some firsthand knowledge that's not made up - recently was lightly rear ended - insurance company would not authorize an oem bumper (aftermarket was about a $90 savings) and the repair shop had to fight for 3 days to get approval of an amended estimate for a $58 bumper absorber.

Insurance companies are a for profit business and I find it more believable that they will make more of an effort to pay as little as they can on a claim than the other way around.
 
Originally Posted By: supton
Insurance company won't give you extra for taking care of the car--they go by whatever fair market value is. If it's dinged up, the market doesn't care as much. You may be paying for one expectation but apt to get something far less than you expect.

I'd say the $5k vehicle is probably time to drop. The $7,500 one, it might be worth keeping for a bit longer. Really comes down to, if you were to total out the car, how easily can you replace it? If it were to be a hardship, carrying the insurance longer may make sense. OTOH, if you already are prepared to replace, then pocket the savings.


On average, you'll pay more in than you take from your insurance company. So, a logical person would NEVER buy any more than liability as required by their state. Anything else, in terms of averages, is a loss for you. If it wasn't, every jnsurance company would be broke.
 
If you're good at saving money, then drop the full coverage. Use the savings to fix the car if it's in an accident. But if you're a reckless spender or a worse driver, then keep the full coverage.

It comes down to whether you have enough money saved up to replace the car in the worst case scenario
 
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