Author Topic: Any Unintended Consequences to Dropping Collision and Comprehensive Insurance?  (Read 1199 times)

kc27

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Hi

I have four vehicles ranging in years from 2000 to 2007. They are all in good mechanical condition, with bodies ranging from fair to excellent due to some rust, but no collision damage. Besides my wife and me, our 20 year-old and 18 year-old drive these cars, too. I have full coverage on all of these vehicles. I do have the funds available where I could replace these cars with something comparable if needed. I am considering dropping collision and comprehensive.

Have I missed any reason or benefit to keep the full coverage? Someone once told me once they felt full coverage had value even on older cars. Their reasoning was that if you have full coverage and get in an accident where it is not your fault, your insurance company will be an advocate for you in dealing with the other driver's insurance company (assuming the other driver does not have the same insurance company as you). Where if you only have liability, your insurance company has no skin in the game, and you are on your own in dealing with the other driver's insurance company. Not sure how valid that is, but if true, that would be an example of an unintended consequence.

lost_in_the_endless_aisle

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I'm kind of curious about other answers as well (since I ditched comprehensive years ago) but wouldn't umbrella insurance fill any gaps that emerged? I have $1M umbrella for ~$9/mo, which is less than comprehensive car insurance would incrementally costs and covers a bunch more (outside of car value, which in my case, is nearly nothing anyway).

SimpleCycle

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I'm kind of curious about other answers as well (since I ditched comprehensive years ago) but wouldn't umbrella insurance fill any gaps that emerged? I have $1M umbrella for ~$9/mo, which is less than comprehensive car insurance would incrementally costs and covers a bunch more (outside of car value, which in my case, is nearly nothing anyway).

Umbrella policies are liability policies - they generally don't cover property damage to your own property.

lost_in_the_endless_aisle

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I'm kind of curious about other answers as well (since I ditched comprehensive years ago) but wouldn't umbrella insurance fill any gaps that emerged? I have $1M umbrella for ~$9/mo, which is less than comprehensive car insurance would incrementally costs and covers a bunch more (outside of car value, which in my case, is nearly nothing anyway).

Umbrella policies are liability policies - they generally don't cover property damage to your own property.
Yes, that I get--dropping comprehensive means self-insuring for the value of the car. By gaps I meant liability gaps that a car insurance company would (hypothetically based on OP) otherwise not vigorously defend against.

Paul der Krake

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I think that's BS.

Why would your insurance company fight for you? Their incentive is to wrap things up as soon as you'll let them.

kc27

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I think that's BS.

Why would your insurance company fight for you? Their incentive is to wrap things up as soon as you'll let them.

Could it be if the inured party policy holder has the option of making a claim on their own insurance? Maybe because the driver who caused the accident has an insurance company that is not providing full remediation to the injured party? So the injured party makes a claim on their insurance which prompts their company to pursue the other driver's insurance company. I fortunately don't have a lot of knowledge of how insurance claims are managed, so this may be an unrealistic scenario.

The few times when I was due compensation due to damage done to my car by someone else, the insurance companies I dealt with were fair and prompt. However, in one case, where the damage to my car was most severe, the body shop I chose performed substandard work. The vehicle showed rust within a year. By that time I had moved and was living nearly 500 miles away, so I really did not have much recourse.

Eric

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I have carried liability only for the last 15 years.  The only thing that comes to mind is that if you're renting a car on vacation, you can't rely on your personal insurance for coverage anymore.  You either have to do the CC coverage thing (which makes me nervous) or shell out the extra ~$10/day.  Of course the overall savings is more than worth it.

kc27

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I forgot about auto rentals. I rent so infrequently, your scenario of the overall yearly savings of liability only coverage outweighing the cost of rental agency add-on insurance makes sense for me, too. If I drop the comprehensive and collision coverage from all the vehicles, I would save $858 a year.


plog

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Liability only here...except when I know I am going to rent a car.  I Call my agent the day before and add comprehensive, call the day after and drop it. 

therethere

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Liability only here...except when I know I am going to rent a car.  I Call my agent the day before and add comprehensive, call the day after and drop it.

Can you explain a little more about this? Wouldn't this generally be covered by the credit card you're using for the rental?

I guess I have done this before when going on a long vacation. I lowered/modified my coverage the day before and after. The dumb things I'll do to save $20.
« Last Edit: March 21, 2019, 01:13:40 PM by therethere »

plog

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I hear it varies credit card to credit card about what is covered, if anything.  So rather than read (and misinterpret) the fine print on my credit card, I just make a call to my actual car insurance agent.   

JLee

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I like having glass coverage, and that requires comprehensive insurance.  Comprehensive / glass adds so little to my policies that it's worth having in the event I lose a windshield, a tree falls on my car, etc. I'd be more likely to drop collision alone, but my two vehicles are worth ~$12k and ~$21k.  At $3-5k I may not.

kimmarg

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Don't drop comprehensive. That covers random 'acts of god' like deer jumping in front of you. It's MUCH cheaper than the collision. Collision means "you hit something you !@#$!@% we're not paying". Comprehensive is "oh !@#$!@  a deer!"

Goldy

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We dropped it on one of our vehicles but kept it on our more expensive one (2k vs 9k).  Curious how insurance would treat that in a rental car scenario.

Ecky

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I've always been under the impression that in the event you make a claim for an "act of God", afterward your premium would go up, so I've always figured it's better to just fix it myself. It makes a lot of sense to me that insurance companies would stack it such that they always win.

JLee

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We dropped it on one of our vehicles but kept it on our more expensive one (2k vs 9k).  Curious how insurance would treat that in a rental car scenario.

Side note, if you frequently rent cars / travel...consider the Chase Sapphire Reserve credit card.  The hefty annual fee is largely offset by the annual travel credit and they are the primary insurer for rentals. I had a friend with a cracked windshield on a rental car and it cost him nothing, with no hit to his personal insurance policy.

Anyway, back on track!

Retireatee1

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The calculus will change if you live in a no-fault state (sound like not).