Car Insurance Liability

[Mulligan]

I am sure I am the only one here who did not know this but I learned a valuable lesson this week. I am acquiring my first vehicle in 12 years, so I started the process of acquiring insurance quotes. Well the first thing it wanted was how much liability coverage was needed. I put in standard which is 100k/300k. To make sure I was comparing apples to apples, I dusted off my policy of 12 years and was kind of shocked to see it was only 50k/100k. Hmmm, with that kind of coverage I better hope to crash into a very close relative. So anyways, my rate was $63 for collision/comp $500 deductible with $100/$300. I then checked $300k/$500k coverage and discovered it was only $2.50 more. I am not much on insurance but with a vehicle it is not financially prudent to go cheap.
My point being is (though most do here, I am sure) make sure you have adequate auto liability coverage, and check to see if additional coverage is available in a cheap manner if needed. Needless to say I am going from underinsured to a more responsible coverage level. I imagine 12 years ago, I just said give me the basic coverage and didn't even put a thought into it. I am fortunate I didn't have to find out if it was enough....


Sent from my iPad using Tapatalk

 

[FIRE'd@51]

You may want to consider adding an umbrella policy, as 300K/500K may not really be enough. My umbrella policy requires me to carry a minimum of 300K/500K (plus 100K property damage) on my auto policy.

 

[Lakedog]

Last year I raised my auto liability limits to 1m/1m (from 250k/500k) as the cost difference was only $9. I don't currently have an umbrella policy.

 

[Mulligan]

I return to agent to wrap up process Monday. I will ask about additional coverage. When I asked for more, this was the only amount above 100k he gave me. I must assume that most people around here do not go above the standard amount. He did mention he did not personally carry umbrella insurance, just the amount above standard for vehicle. I was surprised that credit rating mattered so much. They rate on scale of 1-21 with 21 the worst. He said mine was 5 and he rarely had anyone under 10. What is so hard with paying your bills on time and not maxing out your credit cards? It is not like I do anything special to have a good score for best rate.


Sent from my iPad using Tapatalk

 

[MRG]

You may want to consider adding an umbrella policy, as 300K/500K may not really be enough. My umbrella policy requires me to carry a minimum of 300K/500K (plus 100K property damage) on my auto policy.

My new insurance requires a 300/500k to get an umbrella policy too. I haven't signed yet, plan to get the final numbers Monday. Our old policly went up 50% on renewal. The reason was both DW and I have a moving violation(both almost 3 years old), they finally tagged us for them. Even with the violations our new policy has more liability and 1MM umbrella for 10% more than we were paying. The old company lost our business.

Any future speeding tickets will be given to an attorney!

 

[Walt34]

You may want to consider adding an umbrella policy, as 300K/500K may not really be enough. My umbrella policy requires me to carry a minimum of 300K/500K (plus 100K property damage) on my auto policy.

Same here and we got the umbrella for good reason. A medical helicopter ride can be $40k easy. Intensive care can be $100k or more. Per day. Per person. Not hard at all to smoke through that basic coverage.

And we haven't even started on the lawsuit yet....

 

[Buckeye]

We just got our August renewal email from USAA. I noticed the cost of liability coverage for DH's vehicle (2006, 6-cyl, 4 door sedan, nothing special) was 32% more expensive than for my vehicle (2002, 4-cyl, 4 door sedan, nothing special).

Called USAA to ask why. Agent said, "Dunno." He switched the primary drivers and the cost was virtually the same.

My vehicle is considered a safer vehicle than DH's but liability insurance shouldn't care about the safety of the driver, just the people you are going to run into, right?

The only significant difference between the two vehicles (since the driver has been taken out of the calculation) is that my car is 4-cyl and his is 6-cyl. Is a more powerful vehicle such a greater liability risk? Not talking any hot rod here. Just a 4-door sedan.

 

[Walt34]

Is a more powerful vehicle such a greater liability risk? Not talking any hot rod here. Just a 4-door sedan.

If that is the reason I'd hate to see the premiums on the 707 hp Dodge Challenger!

 

[pb4uski]

When I bought my umbrella we tested some and found that it was cheaper to increase the underlying liability coverage (auto, home, etc.) and buy a smaller umbrella than leave the underlying coverages where they were and add a bigger umbrella. Total coverage was the same.

 

[sailor]

The only significant difference between the two vehicles (since the driver has been taken out of the calculation) is that my car is 4-cyl and his is 6-cyl. Is a more powerful vehicle such a greater liability risk? Not talking any hot rod here. Just a 4-door sedan.

It all comes to statistics, for clues have a look here for both cars: Insurance loss information

This is also a great source of information about relative safety of the vehicles, before buying a new car.

 

[scrabbler1]

Back in 2010 I considered umbrella but soon realized that because I live in a large co-op complex, the co-op's large liability policy acts like umbrella to some degree. I did, however, increase my auto policy's BI liability limits from 100/200 to 250/500.

 

[easysurfer]

Back in 2010 I considered umbrella but soon realized that because I live in a large co-op complex, the co-op's large liability policy acts like umbrella to some degree. I did, however, increase my auto policy's BI liability limits from 100/200 to 250/500.

I live in a condo complex and not long ago a unit did have a fire. The fire was caused buy the dishwasher. Luckily it didn't spread to the outer units but that person had to move to temporary housing as the unit got restored. The owners did have their own insurance (required by every owner). I think had the fire spread to other units, if the owner had umbrella, that may have kicked in.

My policies (both car and condo) have 500K liability limits and then I have an umbrella policy around them. IMO, the price is cheap for the peace of mind, like if your best friend slips on your floor and then decides to sue you for your life savings

 

[Buckeye]

It all comes to statistics, for clues have a look here for both cars: Insurance loss information

This is also a great source of information about relative safety of the vehicles, before buying a new car.

DH's vehicle shows up a couple of times (overlapping windows of data) and all categories are yellow (average). My car is too old to have the property damage and BI data but I looked at a later model close to my model and property damage and BI are yellow. The data appears to be an average for the model and is not broken down by engine size, etc.

Nothing jumps out in the data to explain the 32% difference in BI and the 37% difference in property damage.

I thought maybe a heavier car causes more damage so I checked the curb weight of each vehicle. My car weighs 3,150 lbs and DH's car weighs 3,450. Maybe the extra weight plus the extra horsepower accounts for the difference in risk.

 

[FANOFJESUS]

Last year I raised my auto liability limits to 1m/1m (from 250k/500k) as the cost difference was only $9. I don't currently have an umbrella policy.

I don't think a lot of companies go that high without and umbrella policy. I think 500/500 is the highest I have heard of.

 

[SJ1_]

..I then checked $300k/$500k coverage ..


Sent from my iPad using Tapatalk

that is what was required for our umbrella policy.
after the 300k/500k runs out (hopefully we never need it) the umbrella
policy kicks in..

 

[Lakedog]

I don't think a lot of companies go that high without and umbrella policy. I think 500/500 is the highest I have heard of.

I'm with GEICO.

 

[FANOFJESUS]

I'm with GEICO.

Good to know.

 

[athena53]

I first bought umbrella coverage when I bought a house with a pool in 1997. We have $2 million coverage now.


State minimum liability requirements for auto are a joke in most states. There's tremendous political pressure to keep the limits low so more people will buy coverage, although judging from the cost of Underinsured/Uninsured Motorists coverage, it's not working.

If you buy higher limits, be sure you get Uninsured/Underinsured at the same level. Pitiful that you have to buy coverage for others, but that's pretty much what you're doing.

 

[ExFlyBoy5]

We just got our August renewal email from USAA. I noticed the cost of liability coverage for DH's vehicle (2006, 6-cyl, 4 door sedan, nothing special) was 32% more expensive than for my vehicle (2002, 4-cyl, 4 door sedan, nothing special).

Called USAA to ask why. Agent said, "Dunno." He switched the primary drivers and the cost was virtually the same.

My vehicle is considered a safer vehicle than DH's but liability insurance shouldn't care about the safety of the driver, just the people you are going to run into, right?

The only significant difference between the two vehicles (since the driver has been taken out of the calculation) is that my car is 4-cyl and his is 6-cyl. Is a more powerful vehicle such a greater liability risk? Not talking any hot rod here. Just a 4-door sedan.

Sounds like the USAA I have grown to hate. Give Amica a call...you may be surprised. They are rated as well as USAA and as recently reported by Clark Howard last week rated BETTER than USAA.

Sent From My Motorola Startac. Please excuse grammatical errors.

 

[MooreBonds]

There's tremendous political pressure to keep the limits low so more people will buy coverage, although judging from the cost of Underinsured/Uninsured Motorists coverage, it's not working.

I honestly don't know that it's the only reason they drop it. I have a feeling that no matter what the "state minimum" coverage level, many people will still pull the practice of obtaining insurance coverage, then immediately cancelling it as soon as they get their license plate renewed. For some, it might be a matter of not being able afford that extra $50/mo...but something tells me they would continue the practice of 'short-term auto coverage' regardless of what the monthly premium is.

And the gov't thinks these likely same people will pay 2-4 times - or more - as much as their auto policies for health insurance coverage (with much higher deductibles), when they'll still get service at an OR if they truly need emergency healthcare.

 

[Telly]

We've had an umbrella for over 15 years. Figured the biggest risk to our growing nest egg was an auto accident. And we had kids driving...
A guy in the ins. agency that was very helpful ran the numbers to show us then that hiking up the liability coverage to a certain limit for each of the cars would lower the umbrella premium, so much so that the total of auto ins. + umbrella was less than if we left the cars alone and handled it all via umbrella.

The umbrella premium dropped each time a kid dropped off of our insurance! After the last one, it was way down. Along the way we doubled the umbrella size too.

Still think that an auto accident is our biggest risk factor for our assets. Will probably always have an umbrella.

Walk softly and carry a large umbrella

 

[scrabbler1]

I honestly don't know that it's the only reason they drop it. I have a feeling that no matter what the "state minimum" coverage level, many people will still pull the practice of obtaining insurance coverage, then immediately cancelling it as soon as they get their license plate renewed. For some, it might be a matter of not being able afford that extra $50/mo...but something tells me they would continue the practice of 'short-term auto coverage' regardless of what the monthly premium is.

And the gov't thinks these likely same people will pay 2-4 times - or more - as much as their auto policies for health insurance coverage (with much higher deductibles), when they'll still get service at an OR if they truly need emergency healthcare.

Back in my working years, I worked in the actuarial field, specializing in personal auto insurance. One thing I worked on a lot was pricing changes to state laws relating to minimum (Financial Responsibility, or FR) limits and changes to the strength of a state's mandatory insurance laws. Back in the 1980s and 1990s, when technology changes were on the rise, it was pretty common to see the latter.

If a state strengthened its mandatory insurance law in a manner we felt would actually reduce the uninsured population. we would recommend a reduction in the UM rates. From some outside analysis we had purchased, some measures were more effective at reducing this population than others. The big one we saw back then was a state linking its DMV to insurance cancellation reports so the DMV would know is someone paid the first month's premium to get license plates then stopped paying premiums (and do something about it). Other measures we felt were less effective or not effective at all at reducing the uninsured population.

Because we assumed that any additional insurance purchasers would be buying liability at the FR, we also priced a small increase in the Underinsured Motorists premiums. Therefore, if you bought UM and UIM together, the decrease in UM would be partly offset by a small increase in UIM.

 

[athena53]

I have a feeling that no matter what the "state minimum" coverage level, many people will still pull the practice of obtaining insurance coverage, then immediately cancelling it as soon as they get their license plate renewed.

You're probably right. When I worked for a consulting firm we had a client who wanted to provide a product for that market- the customer would pay a little up front, get their insurance card, and pay the rest in installments. I believe it was a very short-term policy (3 months), to keep the installment low. They knew most policies would lapse when the second payment wasn't made. This was not a major carrier; I wish I could remember the name of the client now. We wanted nothing to do with that product.

I just checked state minimum liability requirements. I started my first insurance job in 1975 and in Ohio you had to buy limits of $12,500 per person, $25,000 per accident bodily injury and $7,500 property damage. That's still the minimum.

 

[38Chevy454]

And the gov't thinks these likely same people will pay 2-4 times - or more - as much as their auto policies for health insurance coverage (with much higher deductibles), when they'll still get service at an OR if they truly need emergency healthcare.

You are being much too logical

 

[Buckeye]

I have been carrying Med Pay instead of UMBI because the Med Pay did not require determination of fault. Is that a crazy choice?