If your insurance coverage has uninsured or underinsured motorist coverage, you should be able to recover
under that. You might be able to collect something in small claims court, but you’re at a disadvantage without
a police report. Hopefully you had a witness. I’ve been where you’re at, and it was a hard lesson for me: to learn: no car, no compensation, and no chance of getting it. You may never have an accident again, but if your car gets customized by the other guy, call the police, check for a valid driver’s license and insurance coverage.
Don’t believe any BS for not having a license or insurance, or any promises to pay for damages.
It’s an '87. I didn’t have comprehensive when I drove it often. That has nothing to do with my argument: insurance companies make money because they collect more in premiums than they pay out in benefits. The average person is better off without it if s/he can handle the loss her/himself. This doesn’t work for most people for their bodies because health loss impairs the ability to make money and can cost millions of dollars. A car owner can’t lose more than the cost of her/his car, can buy a replacement.
I don’t say don’t buy comprehensive; I say calculate all costs & benefits.
Some people spend their pay-out on ‘parties’. I heard a caller on Dave Ramsey: her car had been totaled, she got $5K from the insurance company, then ‘just spent it’. Even having insurance didn’t keep her a car owner. Thought is the missing ingredient in both cases.
You’re a banker aren’t you? You can calculate the net present value of all those premiums: do they exceed the benefits you have collected?
Your math omits the carrying costs and the likelihood that your car will get totaled. You could make a mint selling tiger insurance at $1/year.
I thought insurance paid for the current value of a vehicle. I remember a friend who lovingly restored a '55 Belvedere. A drunk driver totaled it when it was in his sunken driveway (swerved into the yard, over the wall, landed on top of it.) Insurance paid $200 or some similar pittance, the Blue Book value of a '55 Belvedere.
Heh heh heh. Of course they do that’s how they stay in business. Target and Walmart collect more than they pay out too. It’s called profit in the US of A. Bad words in some company but that’s how companies stay afloat here and pay their staff. Naw i’m not a banker and I don’t do NPV calculations on car insurance or on coffee consumed. It’s just a living expense. Although a different policy but the same company, I think that $15,000 they paid for my roof covered quite a few months of insurance premiums. I want them to make a profit though. I might need another roof or car.
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I’m for profit. I’m for buying what I want. I hope that every purchase at Walmart & Targét benefits both the buyer and the seller. I know that some people don’t calculate the potential value of car insurance, that it’s not as simple as a pillow or a bottle of aspirin. I recommend that they think about it.
As many as you have paid? As much money as you would have had had you put those premiums in a savings account until they were enough to put in an S&P index mutual fund?
Until I started Medicare, I bought medical insurance with a high deductible. I didn’t collect a penny in benefits for 19 years (and regretted collecting, of course). I saved a lot of money, paid for all of my medical care out-of-pocket. I also have enough money many times over for both a new car and a new roof - though I probably won’t replace my car if I lose it. (Roof’s a different story.)
Here’s the reality of it all. The bank won’t let you go without homeowners insurance or car insurance and the state makes you pay for at least liability. Unless of course you can prove the five or so million of liquid assets to be self-insured. It’s all worked for me so far and your formula has worked for you.
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It’s less expensive to be your own insurance company if you can absorb the loss. When I was in graduate school, I had a five year old 1965 Rambler. I looked up the book value, figured how much cash I could lay my hands on and decided I would take the risk and drop the collision. I calculated in the salvage value of the car if it was totaled. I also figured if I itemized my income tax I could report the loss I incurred if the car was wrecked. Also, I reasoned that I wouldn’t mind having the car repaired with used parts if I had to pay for the repairs due to an accident. (Replacing a door with one from the wrecking yard that is a different color doesn’t affect the gas mileage).
I want to be insured for a big loss. When I and my wife enrolled in graduate school, we needed medical insurance. We were able to get a policy with $1000 deductible with a monthly premium we could afford. What I saved on dropping my collision coverage on the Rambler I applied to the medical insurance premium.
It seems to me that people want to be insured against any kind of loss and pay tremendous amounts in.premiums for this protection. I see advertisements on television that for a monthly fee which often isn’t disclosed, will replace an appliance in your house if it fails. I just had to replace our dishwasher that quit working after 29 years. I would bet the monthly premium for insuring household appliances would have bought quite a few new dishwashers.
Sorry about your hassle, and there is some good information in the answers. From our experience and that of friends and coworkers, here are several suggestion going forward:
Keep a checklist in the glove box for what to do in event of an accident because you may not be thinking clearly right afterwards - include the usual who, how, what, where, when, witness info, passengers in both cars, etc… topics which include the other drivers license, registration, and plates. (doe the picture match the driver, does the driver match the title, do they have other I.D.? (one friend was given a bogus name and address, which she discovered by insisting on seeing the documents). Take pictures of the damage to both cars, the other drivers license and registration, a picture of the other driver’s face, try to include a landmark in the photo of the cars. Get their insurance info. and call their hotline right then to confirm coverage (it’s distressing how many drop coverage after getting the card). When we learned one driver had lost coverage we asked the cop to impound her car (it was his girlfriend’s father’s, which facilitated payment!). In lieu of insurance, many (all?) states require a driver to show financial means or post a bond to cover damages, so get the cop to verify that or impound the car or driver. If the driver and ownership don’t match up, get the cop to resolve that (you definitely need onsite law enforcement for this one) before he allows the other drive to leave - it could be stolen or used without permission. Make the law work for you.
Except for very superficial damage with no possibility of injury (in the immediate excitement some issues can be missed only to become big deals later), file the police report, on time.
Adjusters initial offers often are low, especially if based on photo or superficial examination. Don’t accept a final payment (for damages or injury) until your body shop has made a thorough, parts-off inspection and, if you will be fixing the car, actually completed the work as it’s not uncommon to uncover more that’s needed (last year we were offered $750 based on pictures of rear end damage that cost almost $4000 once the bumper was removed). Even worse, when my sister-in-law’s RWD car was rear-ended it was discovered only month’s later that the transmission case was cracked by the drive shaft being pushed forward, by which time the lube had leaked out and the gears were toast. For injuries, there’s no need to sign off on a final payment anytime soon (check with an attorney on local laws). It’s okay to accept partial payments as bills come in but only with a written statement that these payments aren’t final - put off final sign-off as long as possible and leave the door open for long term problems (see your attorney).
I’m with the folks who only buy insurance for losses they can’t afford, self-insuring the rest. In over 5 decades of owning cars worth no more than a new Civic I’ve self insured and invested the savings, accruing enough to buy several cars. On the other hand comprehensive insurance has paid for itself in replaced windshields. Do your own risk analysis.
Yeah I had a call from one of those folks a while back. I think it was like $30-40 a month. The girl was hyper and wanted to know what I would do if my refrigerator broke that day. I said I would just buy a new one, but I didn’t think my wife was going let me wait until it broke. Even if it was a good deal which it isn’t, the issues with these companies are the time it takes to get a repair person out and where they come from. I can get a guy out the same day or a replacement, no problem. This is the least hassle for me, like having collision coverage. I don’t have to argue with a company in Kansas, I can just get it fixed.
What does the bank have to do with it?
Read the fine print if you have a mortgage or car loan. You are required to have it or they buy it for you at ridiculous rates. Of course I’ve always had it regardless. Even in school I had renters insurance for theft. fire and liability. With a negative net worth I guess I would have been judgement proof but that would not be responsible.
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Your friend had the vehicle insured WRONG. He/she should have insured it as a classic/collector/antique car, not just any old car, as I have done with my Fieros. The insured names a value and pays insurance premiums based on that.
I do the same with my older boats and items I have covered under a Personal Articles Policy.
Big mistake. You’re scaring me with your insurance knowledge while advising others about insurance decisions.
It pays to know what you’re doing and what you’re talking about. I’m extremely thrifty, but there is such a thing as being penny wise and pound foolish.
CSA
I’m guessing that you crunched some numbers and calculated your “break-even-point” before deciding when to begin taking Social Security? Did you take it early (before age 70 or before your full retirement age)?
CSA
What mortgage? What car loan? Such people buy insurance for their lenders, not their homes and cars.
Doesn’t this require underwriting? Why couldn’t I buy a car for $5K, insure it for $100K, roll it into a culvert the next day?
I’m advising them to pay attention. I haven’t invented the idea of not-buying insurance for something you can afford to replace, including cars. I’ve read about it in Consumer Reports
I’m not 70 yet. I have no intention of collecting SS until I get there. I’ve been in the market for 34 years; I haven’t made 8%/year over that time.
That post makes me agree with CSA , you really have no understanding of insurance enough to be giving advice .
The top .1% wealthiest people don’t have insurance (comprehensive or liability). They self insure.
@MikeInNH. Unfortunately, the bottom .1% don’t carry liability insurance either.
Or enough liability insurance. Here in NH you don’t have to have insurance. And in MA the lowest liability you can carry is around $50k.
Insurance companies will want to se an appraised value from an authorized appraiser to allow you to buy a $100k policy. And let’s say they let you…those premiums would be way north of $5k.
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Most of your points against my post have already been addressed by others but you should re-read my post in this regard because you apparently missed the part about how much more likely it seems now to be involved in accidents. I hadn’t been in one in decades and then a couple that were not my fault along with numerous near misses. I also see people around me getting into crashes and having to repair or replace their cars. Maybe where you live the potential hasn’t gone up, but it has around here…
Insuring classics is one thing that has already been addressed. I have a couple of older cars that are showroom quality that are insured at agreed upon value. They send an assessor to verify the valuation. My example you picked on is a bit different. You can buy REPLACEMENT value insurance for not much more money. My insurance company advertises this advantage and offers it as standard policy. That is why I received more than wholesale or blue book valuation for my Trailblazer. They look at real market value. I was able to find a great deal on a replacement after looking for a while and saved the difference…
What makes you think that approach cannot be applied to collision insurance? You can select the deductible amount there too and save quite a bit on premiums. It’s not an all or nothing proposition…