Do you have 'bare bones' car insurance?

[phunluvin82]

How do you or did you decide how much coverage to have on your car?  Do you have the minimum required coverage, or more?  What was your reasoning?

I am considering dropping our coverage down to minimum required liabilty only...but I'm torn.  We pay about $115/month for a 5 year old Honda Fit.  It's been paid off for a while, but I've still kept the full coverage.  It is our only car and if it were totaled and not covered, we'd be semi-screwed.  We'd have to buy another car immediately b/c we need at least one to get both of us to/from work.  Our savings are currently pretty minimal unfortunately.  If we drained our savings, we could buy a beater.  Or we could finance a used car.  Our credit is pretty good, we'd be able to get a decent rate...but adding a car payment to our monthly expenses would not be ideal either.

What would you do in this scenario?  I'm trying to really trim our expenses...but I can't decided if it's worth the risk if something happens to the car.  WWMMD?

[chessie]

I would keep full coverage if you couldn't afford to get another car if something happened to the current one. I used to just have liability on my old beater, had 300k on it..but other then that, my newer cars, full everything I just wouldn't chance it.

[Deleted]

There are two issues here.

1. Replacement coverage for your vehicle. I would not drop that on a 5 year old vehicle that I didn't want to pay in cash to replace. We have never dropped that until our cars were worth less than $2,000 or so.

2. Liability. There is no reason to reduce this ever. This is the coverage that pays for injuries caused by you (and your uninsured and underinsured coverage pays for you and passengers in your car if someone underinsured or uninsured hits you). We carry a lot of liability insurance ($250k/$500k for liability, UM and UIM, plus a $1M umbrella that includes UM and UIM too). I want to make sure that if I cause or am the victim of a horrible accident that I (and the people in my car) have the most dollars possible available.

[Deleted]

We only have liability, and low limits at that.

The reasons: Well first, our car is totaled. It is drivable and such, but got hit by a tree and the body damage was enough to total it (but we bought it back from the insurance company so we still have it). So we can't have comp and collision anyway. We aren't eligible because we've already been paid out a total loss. If it gets stolen or further damaged, we'll walk away from it.

My husband uses the car *maybe* once every two weeks on average (except to move it from one parking spot to another), and I use it like once every six months, so we figure the risk of something happening are pretty low. We also have it insured as a pleasure vehicle (or something like that) because we drive it for less than 5000 miles a year. We get a discount for that.

But we're definitely special snowflakes.  If we were using the car more, I'd want fuller coverages.

Have you priced out various coverages?  Dropping comp and collision dropped our premiums by $120 a year.  That's it.  So sometimes you won't really save much by changing.

[phunluvin82]

Jan 25, 2013 13:20:02 GMT -5 @totsintosa said:

There are two issues here.

1. Replacement coverage for your vehicle. I would not drop that on a 5 year old vehicle that I didn't want to pay in cash to replace. We have never dropped that until our cars were worth less than $2,000 or so.

2. Liability. There is no reason to reduce this ever. This is the coverage that pays for injuries caused by you (and your uninsured and underinsured coverage pays for you and passengers in your car if someone underinsured or uninsured hits you). We carry a lot of liability insurance ($250k/$500k for liability, UM and UIM, plus a $1M umbrella that includes UM and UIM too). I want to make sure that if I cause or am the victim of a horrible accident that I (and the people in my car) have the most dollars possible available.

Oh no, I was thinking of dropping collision and comprehensive and keeping only liability. 

But I guess the liability coverage I have is a lot more than is required by law...so that's a good point that I may not want to ever reduce that all the way to basic.  Actually, I probably should go back and look up how much liability coverage I actually have.

[phunluvin82]

Jan 25, 2013 13:23:31 GMT -5 v said:

We only have liability, and low limits at that.

The reasons: Well first, our car is totaled. It is drivable and such, but got hit by a tree and the body damage was enough to total it (but we bought it back from the insurance company so we still have it). So we can't have comp and collision anyway. We aren't eligible because we've already been paid out a total loss. If it gets stolen or further damaged, we'll walk away from it.

My husband uses the car *maybe* once every two weeks on average (except to move it from one parking spot to another), and I use it like once every six months, so we figure the risk of something happening are pretty low. We also have it insured as a pleasure vehicle (or something like that) because we drive it for less than 5000 miles a year. We get a discount for that.

But we're definitely special snowflakes.  If we were using the car more, I'd want fuller coverages.

Have you priced out various coverages?  Dropping comp and collision dropped our premiums by $120 a year.  That's it.  So sometimes you won't really save much by changing.

I think last I checked, we'd be looking at $70-80 range, rather than the $115 we pay currently.

I think everyone has me convinced that that's really not enough to be worth risking it.

[pinkdutchtulips]

we have full coverage on 2 of the 3 cars on our policy. h's truck is liability only. the other 2 - we're still paying on mine and his classic car have full coverage.

once we pay off my car, we're still keeping the full coverage. my 100 mile rt commute makes it a smart idea.

[Deleted]

If you can't easily replace the car, or if you would be completley screwed without it, keep the collision and comprehensive coverage.

Believe me, if it ever gets majorly damaged, you'll be breathing sighs of relief. I know it's not cheap now but auto insurance isn't something to scrimp on when you have tight finances.

[Deleted]

We dropped collision when we got a new vehicle and it became our second, rarely used car that was worth about $1500. If something happens (probably unlikely since it's not driven a lot) we'll just resume life with one car, no big deal.

If it was a big deal I'd probably have kept it.

[vegas]

Jan 25, 2013 13:20:02 GMT -5 @totsintosa said:

There are two issues here.

1. Replacement coverage for your vehicle. I would not drop that on a 5 year old vehicle that I didn't want to pay in cash to replace. We have never dropped that until our cars were worth less than $2,000 or so.

2. Liability. There is no reason to reduce this ever. This is the coverage that pays for injuries caused by you (and your uninsured and underinsured coverage pays for you and passengers in your car if someone underinsured or uninsured hits you). We carry a lot of liability insurance ($250k/$500k for liability, UM and UIM, plus a $1M umbrella that includes UM and UIM too). I want to make sure that if I cause or am the victim of a horrible accident that I (and the people in my car) have the most dollars possible available.

Agree with all of this.  I have the exact same coverages as tosa.  I carry higher liability coverages than the state minimums because I want to protect my family.  The bolded coverage is super rare, most companies don't even offer it.

I would keep the collission coverage because I don't want to come out of pocket for a new vehicle.  It doesn't sound like you have enough of a savings cushion to do that anyway.

[Deleted]

LOL, vegas.

Can you tell we've both been insurance defense lawyers?

ETA: In a horrific accident (the kind you hope you're never part of), that money goes fast!

[morningmania]

Jan 25, 2013 13:42:51 GMT -5 vegas said:

Jan 25, 2013 13:20:02 GMT -5 @totsintosa said:

There are two issues here.

1. Replacement coverage for your vehicle. I would not drop that on a 5 year old vehicle that I didn't want to pay in cash to replace. We have never dropped that until our cars were worth less than $2,000 or so.

2. Liability. There is no reason to reduce this ever. This is the coverage that pays for injuries caused by you (and your uninsured and underinsured coverage pays for you and passengers in your car if someone underinsured or uninsured hits you). We carry a lot of liability insurance ($250k/$500k for liability, UM and UIM, plus a $1M umbrella that includes UM and UIM too). I want to make sure that if I cause or am the victim of a horrible accident that I (and the people in my car) have the most dollars possible available.

Agree with all of this.  I have the exact same coverages as tosa.  I carry higher liability coverages than the state minimums because I want to protect my family.  The bolded coverage is super rare, most companies don't even offer it.

I would keep the collission coverage because I don't want to come out of pocket for a new vehicle.  It doesn't sound like you have enough of a savings cushion to do that anyway.

I believe that the highlighted portion of UM and UIM is no longer available under an umbrella unless you were grandfathered in a few years ago. I thought that is at least the case in my state I could be wrong.
We have the same as Tosa but a $2M umbrella. Our insurance agent said that we do not actually need the 250/500 since the umbrella would kick in on the UM/UIM. We only pay $16 every 6 months for 250/500 verses 100/300 so we kept it anyway. 

[AAM2012]

Don't ever decrease your liability limits! They should increase as your assets do.

Also, the company I work for still writes umbrellas with UM but it is extra and you have to sign a form to get it.

[holly116]

We also have lower auto limits (100/300) but a $1 mil umbrella as well. Previous insurance underwriter chiming in.

Go through an independent agency and shop your insurance! We dropped collision on two vehicles (our POS pick up used for HD runs, and my Passat that was paid for in cash and easily replacable if necessary) and have full coverage on DHs 2006 VW GLI. We are renewing in Feb and just received our quote - $1310 for the auto for all three vehicles and $184 for the umbrella, so about $125 a month for those two lines, including all the crazy tax surcharges in our state.

[vegas]

Jan 25, 2013 14:52:22 GMT -5 morningmania said:

Jan 25, 2013 13:42:51 GMT -5 vegas said:

Agree with all of this.  I have the exact same coverages as tosa.  I carry higher liability coverages than the state minimums because I want to protect my family.  The bolded coverage is super rare, most companies don't even offer it.

I would keep the collission coverage because I don't want to come out of pocket for a new vehicle.  It doesn't sound like you have enough of a savings cushion to do that anyway.

I believe that the highlighted portion of UM and UIM is no longer available under an umbrella unless you were grandfathered in a few years ago. I thought that is at least the case in my state I could be wrong.
We have the same as Tosa but a $2M umbrella. Our insurance agent said that we do not actually need the 250/500 since the umbrella would kick in on the UM/UIM. We only pay $16 every 6 months for 250/500 verses 100/300 so we kept it anyway. 

It's still available, it's just rare for companies to offer it any more.  I'm only familiar with one company in my state that still offers it.  Companies still offer the liability umbrella but most don't have the matching UM/UIM coverage. 

[midnightmare81]

I agree with everyone else. I am not sure what we have as far as coverage (I don't know enough and I trust our INS so we have what they suggested). I should look into that.

Anyway, if you cannot afford to replace your current vehicle, I would not drop collision or comprehensive. I imagine that based on your car's age, it is worth a good bit still. Not worth saving a few $

[morningmania]

Jan 25, 2013 16:31:13 GMT -5 vegas said:

Jan 25, 2013 14:52:22 GMT -5 morningmania said:

I believe that the highlighted portion of UM and UIM is no longer available under an umbrella unless you were grandfathered in a few years ago. I thought that is at least the case in my state I could be wrong.
We have the same as Tosa but a $2M umbrella. Our insurance agent said that we do not actually need the 250/500 since the umbrella would kick in on the UM/UIM. We only pay $16 every 6 months for 250/500 verses 100/300 so we kept it anyway. 

It's still available, it's just rare for companies to offer it any more.  I'm only familiar with one company in my state that still offers it.  Companies still offer the liability umbrella but most don't have the matching UM/UIM coverage. 

Maybe by the sounds of it, it was our insurance company that changed. I am certainly glad we have had that coverage for years.

[cowboyjoe]

If you rely on the vehicle and cannot easily replace it, I would keep full coverage.

I had liability on my car in college. A drunk driver hit and ran my vehicle and it was totaled. That was an expensive lesson to learn.