Author Topic: Will I have issues with auto insurance in the future?  (Read 2934 times)

hownowbrowncow

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Will I have issues with auto insurance in the future?
« on: January 18, 2014, 09:47:14 AM »
Sadly no one replied this entry in "Journals" so I'll ask it here

So bit of a setback this week - I said in a previous post that I really should be getting rid of my car 2000 Hyundai Elantra 127k miles.  Average condition cosmetically, runs fine mechanically.  Well since walking/public transit meets a good 80-85% of my needs I considered getting rid of it  but wasn't quite ready to yet.  Well the decision's  been made for me. 

Got into a car accident last Friday.  Basically the driver in front of me slammed the brakes - I did too but not fast enough.  Crappy conditions - dark, rain, traffic.  For the record, I was NOT texting, talking on the phone or under the influence.  His Ford Escape had minimum damage but my poor little car was done for. 

In rare twist of good fortune I had just switched insurance to Metromile and I got a rate of $1.25/day + 5.6 cents/mile.  For about $10-13 less a month, I got higher liability limits plus comprehensive, collusion, and rental reimbursement.  Before I only had liability.     

After my $250 deductible my check for the value of the car will be $1500 (going right to the student loan).  There was minor damage to the other dude's car but well under my limit and thankfully no injuries.

I'm trying to be grateful since no one was hurt and this is annoying but not a financial hardship.  Also at least now I'll get a little bit of money since before I would have totally SOL.  I'm just a little annoyed because I had just put money in it.  $325 for a new timing belt in Nov +$13 for new wiper blades in Dec + $35 for gas THAT day.  I have to just keep telling myself "sunk costs, sunk costs...."

Since walking/public transit covers me  for the most part it won't be a huge adjustment.  I'll look to Zipcar, car2go (like Zipcar but can rent one way), non airport car rentals, UberX and the occasional ride from a friend to make up the difference.  My average use pre-accident was 4-5x/month and I was spending quite a bit for a paid off car to sit unused 87% of the time.  Insurance $680 (prior coverage) + Registration $88. Add in oil changes, repairs and gas, total costs were more than $1200/year.  I'd have to go crazy to spend that much now.

Ok topic - so what will this mean for insurance if/when I own a car in the future?  Was a customer for 30 days.  Got in an accident (ruled my fault) that totaled my car.  After car value is paid and the claim is settled (let's say 60 days from accident), I cancel.  So they get 3 months of premiums (about $120) and pay out a few thousand then I quit.  Will I end up on some car insurance enemies list?

SomeDude

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Re: Will I have issues with auto insurance in the future?
« Reply #1 on: January 18, 2014, 12:35:32 PM »
It depends on state law, but for the most part, it's pretty forgiving and I wouldn't worry too much.  In NC, for instance, insurance companies can only use the last three years to calculate your insurance rate.  There is a point value associated with all tickets or accidents set by the state insurance commission and certain number of points corresponds to a specific maximum rate increase that the law would allow.  The insurance companies don't have to raise your rates that much if they don't want too.  If you are worried about one minor accident, then you are almost certainly someone the insurance companies will want to compete for.  You should be able to find your states specific rules online or you could always call an insurance agent and they should be able to walk you through it.

hownowbrowncow

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Re: Will I have issues with auto insurance in the future?
« Reply #2 on: January 18, 2014, 12:58:21 PM »
Thanks SomeDude :)

I less concerned about the increase from the accident and more concerned about what cancelling is going to do to future rates since I'm going carless now.


bella

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Re: Will I have issues with auto insurance in the future?
« Reply #3 on: January 18, 2014, 03:39:43 PM »
I sold my car last year.    I was concerned about liability limits if I hit someone in a Zip car or a borrowed car and I also like to carry an Umbrella policy to protect my assets.    I'm retired and live off my assets.     I bought non-owner auto liability insurance.  It is hard to find and expensive with most companies.    I did find it through Geico at the most reasonable rate.     This does two things...keeps me an insured person and protects my assets in case I really do some damage! 

RootofGood

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Re: Will I have issues with auto insurance in the future?
« Reply #4 on: January 18, 2014, 04:14:16 PM »
I'm curious if you'll be able to keep a valid driver's license and not carry insurance.  In my state (NC) I think you have to carry the state minimum liability insurance if you want to keep a driver's license. 

A little story: I wrecked my car in high school and the insurance rates went crazy.  Since I couldn't park a car on campus my freshman year of college, a car was almost useless to me 90% of the time (and more of a liability).  During college, I dropped my insurance altogether to save a few thousand $$/yr.  Later in college, I decided to get a car and renew my driver's license.  All of a sudden the insurance company viewed me as "previously uninsured" so I ended up paying insurance rates like a 16 year old newly licensed driver (when I was actually 20).  After a few years of successful driving accident-free, the insurance rates dropped rapidly. 

In your case, I don't think you'll get into trouble with insurance companies in the future because you cancel your insurance now (right after a wreck), but you might pay a lot more if you aren't a licensed driver.  YMMV of course.

This_Is_My_Username

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« Reply #5 on: January 19, 2014, 01:04:17 AM »
Quote
so what will this mean for insurance if/when I own a car in the future?

probably nothing. 

some insurers ask: "have you had an at-fault accident in the last 5 years?" and increase your premiums slightly.  This is a tiny bit bad for you for the next 5 years.

a single insurance company will see hundreds of similar acidents per day - no one will give a shit about you in particular.