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Car Insurance
Old 04-12-2005, 03:25 PM   #1
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Car Insurance

I am asking this question for a friend. I myself current have bare bones liability insurance, cause my car is fully paid off and not worth too much.

I have heard recommendations that IF your car is fully paid for, you might as well get liability insurance to lower your payments, but I wonder how you make this decision intelligently.

My friend currently has a 98 Civic, fully paid off. KBB value is around 7k.

Currently she's paying for full coverage with 1000 deductibles for collison/ comprehensive, and its running her 1800ish a year.

I've seen quotes as low as around 1200 a year for liability. Wondering if this would be worth it for her.

Also, when setting liability minimums, about how much should one select? She does not have much assets at all to protect
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Re: Car Insurance
Old 04-12-2005, 05:37 PM   #2
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Re: Car Insurance

Try this Dollar Stretcher article and then search their archives for "car insurance".

I don't understand your meaning of "get liability insurance to lower your payments" if your car is fully paid off. Liability insurance is mandatory in some states. If it's not mandatory, what payments would it lower?

At $7K value and $1800 premiums she's buying the car every four years. Perhaps it's time to raise the deductibles or even to drop the collision/comp coverage. We usually do that when a car reaches that age but it depends how much risk & self-insurance your assets can handle.
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Re: Car Insurance
Old 04-12-2005, 06:07 PM   #3
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Re: Car Insurance

$1200/year for liability I have full coverage ($500/$500) with $300k liability limits and only pay $650/year for my '98 camry. My coverage is through Pemco.
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Re: Car Insurance
Old 04-12-2005, 06:13 PM   #4
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Re: Car Insurance

We are paying around $940 per year for THREE
vehicles. This includes 300K max. liability per
occurence plus comp. with a $500 deductible and
road service ($50 per occurence) but no collision
of course. I've been thinking about going with the
minimum required by the state (Illinois in my case).
My agent has told me she won't write this, knowing
what I potentially would stand to lose. We have no umbrella coverage. Anyone else rolling the dice on this?
I know our premium is pretty low already as I have shopped
hard. Still, I am always considering my options.

JG
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Re: Car Insurance
Old 04-12-2005, 06:25 PM   #5
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Re: Car Insurance

People love to sue, and that's why I have the limits I have. I once got into an accident years ago when I only had the state min limits, and I did not sleep well for a few weeks... no one was hurt or anything, but as I said, people love to sue. Shortly after that accident, I bumped my limits up to $300k.... i'm sure that should I ever get into an accident again, I will sleep much better.

Once I reach a point where I actually have something to lose, an umbrella policy will be first on my list.
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Re: Car Insurance
Old 04-12-2005, 06:58 PM   #6
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Re: Car Insurance

A couple points. We pay $1,800 a year for three vehicles. One is a 1985 VW camper van, just minimum insurance. Then we have a 1997 Miata which has comp and collision. Then we have an 05 Ford Focus (great little car, the first American car that is as good as our previous 2 Honda Civics). One car at least needs full coverage to have the same coverage on rental cars. We live in Southern California.

Now the real issue is our soon to be 16 year old son is soon to have a license. If he can drive anny car at all, meaning designating the VW van, it will cost about $2k just to cover him. Each year the insurance company asks for a list of all persons in the household with a license.

Pretty far from ER but anyone have great insights into car insurance for teens? Maybe something TH will have to worry about?
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Re: Car Insurance
Old 04-12-2005, 07:11 PM   #7
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Re: Car Insurance

Quote:
Pretty far from ER but anyone have great insights into car insurance for teens? Maybe something TH will have to worry about?
make them pay for it? I know I will when I have kids...

Shop around and ask for discounts (good student, etc). My parents had national merit when I turned 16 back in the day, and if you know anything about that company, new drivers are not their cup of tea.... their rates were insane. Pemco has been really good for the 2 years I have had them, and their rates have been the lowest I have found.
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Re: Car Insurance
Old 04-13-2005, 08:49 AM   #8
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Re: Car Insurance

Quote:
Pretty far from ER but anyone have great insights into car insurance for teens? Maybe something TH will have to worry about?
- Try USAA (they've greatly relaxed their membership qualifications) or GEICO.

- Most companies give discounts for driver education courses.

- Most companies give "good student" discounts for A/B averages.

- Some states have evening curfews (license limitations) which can help with insurance companies. Watch out for night-shift jobs that can raise insurance rates.

But the ultimate threat is:
- Once you earn a license we're not driving you anywhere any more, and
- If you violate the terms of your driving contract with us parents then you're paying your own insurance.

When the only alternative is friends, buses, & bicycles then responsibility isn't so hard. The resistance crumples fairly quickly.
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Re: Car Insurance
Old 04-13-2005, 10:09 AM   #9
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Re: Car Insurance

Quote:
Pretty far from ER but anyone have great insights into car insurance for teens? Maybe something TH will have to worry about?
Since I almost killed myself the first night I was out driving my first car, there will be no car for him! I'm going to make him run everywhere he goes. Flat as a pancake around here, so that should work out for him.
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