Cars: on collisions and insurance
January 4, 2016
Have we been throwing money away on our auto insurance?
I semi-regularly shop around for better rates but totally forgot to reconsider the coverage itself. We tend to select fairly comprehensive (not to be confused with the coverage itself called “comprehensive”) policies, but the recent kerfuffle reminded us that our vehicles are old and not worth much so any real damage wouldn’t call for a repair job, it’d be a total loss so far as the insurance is concerned.
- We’ve got this down, sadly, but Donna Freedman’s article on What to do after an accident is always handy.
Car #1, the 11 year old that took the hit this Christmas is a great road tripper, with generous space for us and the kids, and relatively good mileage. We love the little amenities that we’d never considered before when buying newer and therefore pricier: seat heaters are pretty awesome. Not necessary but awesome. Unfortunately, for all its utility and functional value to us, the KBB value hovers around a paltry $4000. That’s not even halfway to a used car even the way we shop. It’d be a Major Surprise if insurance will agree to cover the repairs, but we live in hope. Cross your fingers for us while we work on that.
Meanwhile, Car #2, my 12-year-old car that serves my dad has nearly 200K miles, and is (probably generously) BlueBooked at about $3100. It likely only clocks in at that much because they stopped making that model a year later making it a “limited” edition.
And Car #3, my 12-year-old daily driver is worth an astounding $5000 if we were to sell to a private party now. That’s not terrible when you consider we didn’t pay much more than that for it 4 or 5 years ago but it’s still only enough to dent the cost of any replacement on the used private-seller market.
(We’re resolved never to buy new again unless there are such major discounts as to negate the drive off the lot depreciation, so only the used market has any bearing on our decisions.)
Our comprehensive coverage/deductible runs $42/year for Car #3 while Car #2 costs $90/year. That plus the $62/year we were paying on the Crunched Car doesn’t add up to the wildly extravagant waste of money I was imagining when I fired up this train of thought.
We have the savings to replace any of the cars outright if we have to, not that I’d love paying that bill, but we can. Then again, at $200 a year for all cars ranging from $3000-5000, does it make sense to keep our comprehensive coverage? The math suggests we wouldn’t want to pay that for more than five years before that cost and the deductible combined are about half any money we’d get back assuming it’s totaled. Less than that if it’s just a minor thing. (My math may still be iffy, I’m still recovering from holiday horrors.)
What kind of coverage do you carry? For what kinds of cars? Are you happy with your insurer?
We have full coverage both on our RV and our car. We pay around $100 a month for both, which isn’t too bad especially considering one is an RV!
That sounds like really good pricing, indeed, I’d never considered how much an RV would cost to insure but I assumed it was a lot more than a regular car.
Man, I wish the drivers that moved to my area knew how to drive! 🙁 LOL We’re one of the highest.
I currently have comprehensive/collision/UM.
Ugh, that’s terrible! I feel like the drivers everywhere we live are awful. I’m glad that they require everyone to carry insurance, though.
I’m curious on what cars you drive! I’m in the market, sort of kind of, for a car for us since the disaster that was our last car and I want something that will last. This post definitely caught my interest, so thanks for sharing! I’ll gobble up any other posts about cars and insurance.
I’ll message you privately but we also look for cars that will last, that don’t have too many miles (as old as we’re willing to buy them, we’re still targeting under 100K), that are good builds and models. We’ll pay a little more for a car that will run well for years.
Basically once we moved into the $1500plus car bracket, started getting full coverage as replacing the car would have been too hard financially in the worst case. I cannot believe how low your rates are! Though not sure from your wording what ‘fairly comprehensive’ means. Currently under $700 for full coverage on a 5yo car. So much better than paying like $1300 for a 15yo car (or maybe it was 10, either way…). The fringe benefits of ageing (combined with better driving record and no claims bonus)
We have comprehensive (everything but an actual accident like floods, tree falling on it, weird stuff) and collision (so, actual collision) and uninsured motorist coverage. So that’s just about everything they offer on a car here.
I wonder if your used car market compares the same to ours!
I just checked and my comprehensive costs about $20 for 6 months on my 5 year old car. I think I’ll keep that 🙂 Last I checked the value was down to around $9k. I plan to hold onto it for another 5-10 years at this rate. My total car insurance cost is under $500 for 6 months now, which is pretty nice to be in at last.
What a bargain!
One of the reasons I keep resisting getting rid of the Dog Chariot is that the insurance rates are so low on a 16-year-old clunk. It keeps on running; maintenance bills are there, but one heckuva lot less than 30 grand to replace the thing.
And…the insurance covered my friend’s car after I smushed two panels on it in the parking lot. My car was barely even scratched — polished off the scratches in the paint with some scratch remover. Hers had thousands of dollars worth of body repair, plus the cost of a rental so she could get to work.
We feel the same way! It’s not a clunker yet, even, but maintenance and so on are just nothing in comparison to shelling out for a new (even just a new to us) vehicle!