Auto insurance: do I really need full-coverage?

[spiralout]

Lately, I've been thinking that I should change my insurance policy from full-coverage to liability. I'm on my parents insurance, but I'm still paying $200/month, and it's really taking a huge chunk out of my paycheck. I've been driving for 5 1/2 years and have NEVER gotten in an accident and have only gotten 1 speeding ticket, so I'm not a high-risk driver, and I don't see why I should be paying so much for insurance if I'm not even using it. Any thoughts?

 

[Alison]

I think it all depends on what would happen if your car gets wrecked. Unfortunately even if you get hit by another driver it's possible that they won't be insured and you'll end up having to pay for it. Right now we have two of our cars fully insured and one liability only (we're going to be selling it). The deciding factor for us was what would happen if the car was totaled or required a lot of repair, could we afford it?

 

[spiralout]

Yeah, I'm not sure how much car repair would be, but I've probably already spent well over $5000 more than I would have with just liability. I'm sure I'd have to get in a pretty bad wreck to have to pay that much for repair. That's half what I paid for my car.

 

[Big Mike]

That's about it...could you afford to fix it, if you did ding it up? or would it be worth it?

If you are driving a nice vehicle that would cost a lot to fix (if in an accident) or if it's in good condition and could still be sold for a good price...then collision insurance might be a good idea. Think of it as protecting your investment. If you are making payments on it...the insurance is either required or a really good idea.

Typically, I have not had fire/theft/collision on my cars...as they were mostly pieces of junk. When I was younger, I was paying $300 a month (liability only) for insurance on a car that was only worth $300. That really sucked.

Do you have your own car? or do you drive your parent's car? If you have your own, I suggest that you shop around for a better deal. I finally outgrew the bad marks on my driving record and got insurance with a group policy through my professional affiliation...now my insurance is rather reasonable. Although that doesn't stop me from thinking the whole insurance industry is just a big scam. :roll:

 

[spiralout]

I own a '99 Ford Taurus that I bought used for $9000. I probably should shop around, but that's one of those things I never really got around to... although I'm probably going to check that out tomorrow. This policy is really eating a hole in my pocket. And I agree, insurance is a scam, and they can get away with it because auto repair is an even bigger scam.

 

[graigdavis]

I was paying $180 a month with one company. I switched to Progressive and got the same coverage for $350 for 6 months ($60 a month).

 

[photogoddess]

I think you're paying WAY too much and need to price shop a bit. My 16 year old son is on my policy, drives a restored 1971 Pontiac Firebird with full coverage (100/300/50) and uninsured coverage for less than $90 a month. Although it is an older car, it is technically a sports car. I'm thinking that I got off light with his insurance costs.

 

[Big Mike]

My 16 year old son drives a restored 1971 Pontiac Firebird

Will you be my Mother?

 

[photogoddess]

Will you be my Mother?

Hahahahaha - I don't think I could afford another child that wanted expensive cars (toys) to drive.

My 15 year old son has a 1964 Nova that is getting restored now and my 13 year old daughter has a 1967 Pontiac Firebird convertible getting ready for her to drive when she turns 16. Maybe my kids are a little too spoiled. :roll:

Spiralout - good luck on your price shopping. I'd stick with the full coverage though.

Just for BigMike, here's a pic of the 71 Firebird.

 

[Andrea K]

im 16 and im paying roughly 2100 a year on my mom's policy. it was about 2400 but because of a driver's ed discount and good student discount it went down a bit. ('95 bmw 530i)

 

[Big Mike]

That's a beauty.

I've always though that a teenager's first car should be a junker. That way they learn to appreciate & take care of their cars. (especially important up here, where a stalled car can mean freezing to death). Also, I think it's better to learn to drive with a junker, especially with the icy roads in winter. I've seen so many 16 year olds smash up their brand new cars.

Of course, I never had the chance to own a car like those ones, when I was a teenager...

 

[Aoide]

$200 a month sounds really expensive. I'm paying about $70 a month.

The biggest thing as ever one has said is can you afford to fix the car if something happened to it. Accidents happen whether you are a good driver or not. Consider where you are living, how far you have to drive to school, how much do you drive around the city? Once school starts do you stay on campus or do you drive around a lot. All things to think about. But I think you are best served in shopping around and getting some new insurance.

As a personal side note, I was so thankful for my insurance after Tropical Storm Allison. It paid for all of my car repairs which were $1600. That's not a lot compared to other people losing their cars and their homes, but there is no way I would have been able to pay it. So in that instance I was glad for the full insurance.

 

[photogoddess]

State Farm gives a good student discount as well. Since we have several cars, we also get a "multi car" discount. On top of that, they had my son come down, watch a video and take a test in their office that gave us an even better discount. Truthfully, I was absolutely shocked that his insurance wasn't a lot higher. I think a little shopping around will find Spiralout some better rates.

I always said that my kids would start out in junker bugs but it didn't end up that way. This kid really does appreciate his car to the degree that he's out there wiping it down anytime a bird craps on it. "Don't you know what bird crap does to paint MOM!"

 

[molested_cow]

It depends on where you live. I live in Detroit and insurance is insanely high.

 

[fadingaway1986]

My car cost $6990. (However its on a loan, so it will end up costing about $1000 more than than with interest).

Before I got my licence, my insurance was under my mum's name. However, when I got my licence, to be fully insured, the price went up by about $900. We thought this was rediculous. I think the price ended up at about $1400 a year. Then if anything happened, my excess (deductible) was about $1200.

So if I crashed my car in the first year, that was $2600 I would have had to pay. Thats more than a third of the cost of my car!

So we took the insurance down to what they call "Third Party, fire and theft". This means, if I hit someone else, it will pay for their repairs. And also fire and theft, which are self explanatory. Also, if I have an accident that wasn't my fault, and I was able to get some info on the other driver (like licence plate, name, etc.), the insurance would pay up to $5000 (i think) to fix my car.

This insurance cost me $400 for the year. However the excess is still $1200. But there is nothing I can do about that, because it is my age that is making it so high.


My parents told me that I should be saving up some money, incase I do have an accident that is my fault. Luckily for me, my dad maintains my car - so minor things he would be able to fix, but my uncles work with cars, and drive rally cars and are good at repairs (I think they do panel work too)... So that should help a bit with the costs.


Hope this helps you.