The Money Mustache Community

Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: nottoolatetostart on January 16, 2014, 07:41:48 AM

Title: Auto Insurance Limits - what are yours?
Post by: nottoolatetostart on January 16, 2014, 07:41:48 AM
Hi - looking at auto insurance quotes. We own 2 2009 cars (Toyota Matrix 72K miles, Honda Civic 55K miles) free & clear. We may sell the Honda later this year, but for now, I would love to reduce the amount we pay in auto insurance. We are fully covered (comp/collision/high liability due to carrying umbrella policy). We pay $1180/yr with State Farm.

Geico and Progressive quotes for $100K/$300K liability, no med payments (we have good medical insurance already) is around $440/year. So we would save $740/year.

What are your liability coverages? Is $100K/$300K/$100K too much liability?

We have enough in our emergency fund to cover purchasing another car (if we needed one) and only debt is $39k on our home.

Thanks!
Title: Re: Auto Insurance Limits - what are yours?
Post by: clarkm04 on January 16, 2014, 07:58:04 AM
I think that coverage is fine and so does Consumer Reports.

http://www.consumerreports.org/cro/magazine-archive/2010/october/money/car-insurance/auto-insurance-coverage/index.htm

I can't find their more in-depth article, but they wrote how going state mins., is pennywise but pound foolish, since if you're in an accident it's likely you'll be on the hook for some of the damages.
Title: Re: Auto Insurance Limits - what are yours?
Post by: MissStache on January 16, 2014, 08:05:39 AM
I have 300/300 BI limits, 100K PD limits.

I carry full coverage on my vehicle (2006 Kia Spectra) with $250 collision ded. and $50 comprehensive ded, with rental and ERS coverage.  I also have uninsured motorist coverages, which may not be available in your state.  No med coverage on my policy.  I pay $272 per six months with GEICO. 

I've talked A LOT about insurance on these forums, mostly because I work in the industry, and I don't think there is such a thing as too much coverage, especially in our litigious society.  I'm considering bumping up my PD limits to 300K when it is time to renew. 

I think you'll find that your libility limits have a tiny impact on your premium.  Your first party coverages (collision, comprehensive) are what drives your premium and you can add thousands of dollars of liability coverage for very little. 
Title: Re: Auto Insurance Limits - what are yours?
Post by: golfer44 on January 16, 2014, 08:12:35 AM
I carry full coverage on my vehicle (2006 Kia Spectra) with $250 collision ded. and $50 comprehensive ded, with rental and ERS coverage.
I've talked A LOT about insurance on these forums, mostly because I work in the industry, and I don't think there is such a thing as too much coverage, especially in our litigious society.

Hey MS- I'd love to pick your brain on this then! I'm wondering why your deductibles are so low, and why you go for the rental coverage. I've always approached insurance/warranties/etc with "can I afford to replace this if it breaks". If I get a $100 item from best buy, I'll never get the extended warranty because I can afford to replace it if something happens, so I'm better off self-insuring.

With a car, I punched my deductibles as high as they'll go, as I'm comfortable with paying that deductible if something should happen, vs cushioning the imaginary blow each month with a guaranteed, higher payment. As close to self-insurance as I'm comfortable with.
Title: Re: Auto Insurance Limits - what are yours?
Post by: Phoebe on January 16, 2014, 08:36:08 AM
Here are our coverages:
Bodily Injury: $500,000  Per Occurrence $250,000  Per Person
Property Damage: $100,000  Per Occurrence
Medical Expense: $10,000  Per Person
Uninsured Motorist: $100,000  Per Person $300,000  Per Occurrence
Underinsured Motorists (UIM) Coverage Endorsement: $100,000  Per Person $300,000  Per Occurrence

We don't carry any collision or comp because our cars are old and would most likely be "totaled" in any wreck and we'd only get a couple thousand for them.  One of my favorite things about having old cars!
Title: Re: Auto Insurance Limits - what are yours?
Post by: rocksinmyhead on January 16, 2014, 08:42:44 AM
I carry full coverage on my vehicle (2006 Kia Spectra) with $250 collision ded. and $50 comprehensive ded, with rental and ERS coverage.
I've talked A LOT about insurance on these forums, mostly because I work in the industry, and I don't think there is such a thing as too much coverage, especially in our litigious society.

Hey MS- I'd love to pick your brain on this then! I'm wondering why your deductibles are so low, and why you go for the rental coverage. I've always approached insurance/warranties/etc with "can I afford to replace this if it breaks". If I get a $100 item from best buy, I'll never get the extended warranty because I can afford to replace it if something happens, so I'm better off self-insuring.

With a car, I punched my deductibles as high as they'll go, as I'm comfortable with paying that deductible if something should happen, vs cushioning the imaginary blow each month with a guaranteed, higher payment. As close to self-insurance as I'm comfortable with.

I wonder about this stuff too and would love to hear MS's opinion. I felt like my insurance was annoyingly high... I've been with State Farm forever so I got quotes from Geico and Esurance and they were basically the same. I guess maybe it's because my car is <2 years old and possibly I live in a bad zip code...

Then I saw that my deductibles were $500 collision and $100 comprehensive, which apparently is even higher than MS's, but I thought that seemed ridiculously low since that is the kind of thing my $12k emergency fund is for. So I pushed them both to $1000 and saved $20 a month. Is that stupid?
Title: Re: Auto Insurance Limits - what are yours?
Post by: MissStache on January 16, 2014, 08:47:04 AM
I carry full coverage on my vehicle (2006 Kia Spectra) with $250 collision ded. and $50 comprehensive ded, with rental and ERS coverage.
I've talked A LOT about insurance on these forums, mostly because I work in the industry, and I don't think there is such a thing as too much coverage, especially in our litigious society.

Hey MS- I'd love to pick your brain on this then! I'm wondering why your deductibles are so low, and why you go for the rental coverage. I've always approached insurance/warranties/etc with "can I afford to replace this if it breaks". If I get a $100 item from best buy, I'll never get the extended warranty because I can afford to replace it if something happens, so I'm better off self-insuring.

With a car, I punched my deductibles as high as they'll go, as I'm comfortable with paying that deductible if something should happen, vs cushioning the imaginary blow each month with a guaranteed, higher payment. As close to self-insurance as I'm comfortable with.

I lowered my deductibles a few months ago when it was time to renew.  I had them at 500/500, but it changed the amount of my premium went up by $5/month when I lowered them.  It was so cheap that I decided to do it.

When I got the coverage, I didn't have a big emergency fund, and $500 would have been a huge hit.  I have the low comprehensive deductible because I hate having to pay a lot if something happens to my windshield.   I don't really need it anymore, but I've already paid in full.  I will probably bump them back up when I renew next time since my stash has grown considerably in the last few months.

I'll never get rid of the rental coverage.  I think it is something like $15/6 months?  So cheap, and definitely useful if I need it. 

I am admittedly over cautious about this stuff, and risk-averse.  Working in insurance claims will do that for you :)
Title: Re: Auto Insurance Limits - what are yours?
Post by: MissStache on January 16, 2014, 08:49:18 AM
I carry full coverage on my vehicle (2006 Kia Spectra) with $250 collision ded. and $50 comprehensive ded, with rental and ERS coverage.
I've talked A LOT about insurance on these forums, mostly because I work in the industry, and I don't think there is such a thing as too much coverage, especially in our litigious society.

Hey MS- I'd love to pick your brain on this then! I'm wondering why your deductibles are so low, and why you go for the rental coverage. I've always approached insurance/warranties/etc with "can I afford to replace this if it breaks". If I get a $100 item from best buy, I'll never get the extended warranty because I can afford to replace it if something happens, so I'm better off self-insuring.

With a car, I punched my deductibles as high as they'll go, as I'm comfortable with paying that deductible if something should happen, vs cushioning the imaginary blow each month with a guaranteed, higher payment. As close to self-insurance as I'm comfortable with.

I wonder about this stuff too and would love to hear MS's opinion. I felt like my insurance was annoyingly high... I've been with State Farm forever so I got quotes from Geico and Esurance and they were basically the same. I guess maybe it's because my car is <2 years old and possibly I live in a bad zip code...

Then I saw that my deductibles were $500 collision and $100 comprehensive, which apparently is even higher than MS's, but I thought that seemed ridiculously low since that is the kind of thing my $12k emergency fund is for. So I pushed them both to $1000 and saved $20 a month. Is that stupid?

Certainly not stupid!  If I had a 12K EF I'd probably do the same.   
Title: Re: Auto Insurance Limits - what are yours?
Post by: rocksinmyhead on January 16, 2014, 08:51:17 AM
Thanks!! You have set my mind at ease :)
Title: Re: Auto Insurance Limits - what are yours?
Post by: TLV on January 16, 2014, 11:10:58 AM
We have 300/300/100 liability, which is the minimum required by our umbrella insurance policy.

We don't have any other coverages - we can easily afford to replace the car, and we have good health insurance. The main situation we could substantially benefit by more coverage would be if we were carrying a passenger who didn't have good health insurance, but that has only happened maybe twice in the last 5 years (we have a small ugly car an no one wants to ride with us, plus we know most of our friends also have good insurance anyway).
Title: Re: Auto Insurance Limits - what are yours?
Post by: Pex on January 16, 2014, 01:41:27 PM

Hi all;

My wife and I definitely need help on this.  I would like to know exactly what we should be getting on our cars and home as far as coverage limits goes.  The house is worth around 170k, the two cars maybe 20k each.

We're very close to FI (wife will retire this year) but we are paying a fortune in car and house insurance (3k annually).  I really need to know exactly what coverage I need to protect us from both natural and lawyer-made disasters.

We've called Progressive, Geico, etc and the numbers all seem to work out to be the same.  My wife and I have gotten one speeding ticket in 20 years.  No accidents.  No claims.  Great credit.  I assume we're over-covering because we're trying  to be safe.

Thanks in advance;
Pex
Title: Re: Auto Insurance Limits - what are yours?
Post by: MissStache on January 16, 2014, 01:53:37 PM

Hi all;

My wife and I definitely need help on this.  I would like to know exactly what we should be getting on our cars and home as far as coverage limits goes.  The house is worth around 170k, the two cars maybe 20k each.

We're very close to FI (wife will retire this year) but we are paying a fortune in car and house insurance (3k annually).  I really need to know exactly what coverage I need to protect us from both natural and lawyer-made disasters.

We've called Progressive, Geico, etc and the numbers all seem to work out to be the same.  My wife and I have gotten one speeding ticket in 20 years.  No accidents.  No claims.  Great credit.  I assume we're over-covering because we're trying  to be safe.

Thanks in advance;
Pex

Hi Pex!  What are your vehicles and what are your current coverages and deductibles? And if you feel comfortable telling us, where do you live?  That can make an enormous difference. 
Title: Re: Auto Insurance Limits - what are yours?
Post by: Spork on January 16, 2014, 01:56:09 PM
I carry full coverage on my vehicle (2006 Kia Spectra) with $250 collision ded. and $50 comprehensive ded, with rental and ERS coverage.
I've talked A LOT about insurance on these forums, mostly because I work in the industry, and I don't think there is such a thing as too much coverage, especially in our litigious society.

Hey MS- I'd love to pick your brain on this then! I'm wondering why your deductibles are so low, and why you go for the rental coverage. I've always approached insurance/warranties/etc with "can I afford to replace this if it breaks". If I get a $100 item from best buy, I'll never get the extended warranty because I can afford to replace it if something happens, so I'm better off self-insuring.

With a car, I punched my deductibles as high as they'll go, as I'm comfortable with paying that deductible if something should happen, vs cushioning the imaginary blow each month with a guaranteed, higher payment. As close to self-insurance as I'm comfortable with.

Along those same lines....  I'd like to hear why the comprehensive/collision on a 7-8 year old car?   (Not trying to facepunch you here... just curious.)

I totaled a car (with comprehensive/collision) back in college (many years ago).  I got about 50% what it was worth... and when I did the math on what I'd paid in... I clearly came out upside down.  (I would have been upside down even if they'd paid me 100% what it was worth.)
Title: Re: Auto Insurance Limits - what are yours?
Post by: MissStache on January 16, 2014, 02:12:10 PM
I carry full coverage on my vehicle (2006 Kia Spectra) with $250 collision ded. and $50 comprehensive ded, with rental and ERS coverage.
I've talked A LOT about insurance on these forums, mostly because I work in the industry, and I don't think there is such a thing as too much coverage, especially in our litigious society.

Hey MS- I'd love to pick your brain on this then! I'm wondering why your deductibles are so low, and why you go for the rental coverage. I've always approached insurance/warranties/etc with "can I afford to replace this if it breaks". If I get a $100 item from best buy, I'll never get the extended warranty because I can afford to replace it if something happens, so I'm better off self-insuring.

With a car, I punched my deductibles as high as they'll go, as I'm comfortable with paying that deductible if something should happen, vs cushioning the imaginary blow each month with a guaranteed, higher payment. As close to self-insurance as I'm comfortable with.

Along those same lines....  I'd like to hear why the comprehensive/collision on a 7-8 year old car?   (Not trying to facepunch you here... just curious.)

I totaled a car (with comprehensive/collision) back in college (many years ago).  I got about 50% what it was worth... and when I did the math on what I'd paid in... I clearly came out upside down.  (I would have been upside down even if they'd paid me 100% what it was worth.)

Comprehensive:  I live in a wooded area with a surprising amount of deer.  I'm also in an area with some history of break-ins.   I'm much more likely to use comprehensive than collision. 

Collision:  I'm not a great driver.  I haven't had an accident since I was in college, but that is mostly luck.  If I get in an accident, it will probably be my fault. 

My car is worth about $4,500.  It's paid off, well-maintained, and I plan to drive it for a long, long time.  My EF isn't currently large enough to take a replace-a-car hit just yet. 
Title: Re: Auto Insurance Limits - what are yours?
Post by: Pex on January 16, 2014, 02:45:53 PM

Hi all;

My wife and I definitely need help on this.  I would like to know exactly what we should be getting on our cars and home as far as coverage limits goes.  The house is worth around 170k, the two cars maybe 20k each.

We're very close to FI (wife will retire this year) but we are paying a fortune in car and house insurance (3k annually).  I really need to know exactly what coverage I need to protect us from both natural and lawyer-made disasters.

We've called Progressive, Geico, etc and the numbers all seem to work out to be the same.  My wife and I have gotten one speeding ticket in 20 years.  No accidents.  No claims.  Great credit.  I assume we're over-covering because we're trying  to be safe.

Thanks in advance;
Pex

Hi Pex!  What are your vehicles and what are your current coverages and deductibles? And if you feel comfortable telling us, where do you live?  That can make an enormous difference.

We have 2 Hyundai's 2010 and 2011 - we're 300k/300k/100k I believe (looking for advice on this- we can change it ).
We live in Houston, TX
Title: Re: Auto Insurance Limits - what are yours?
Post by: 153 on January 16, 2014, 02:49:42 PM
Comprehensive:  I live in a wooded area with a surprising amount of deer.  I'm also in an area with some history of break-ins.   I'm much more likely to use comprehensive than collision. 

I recently crunched some numbers for my car and came to a similar conclusion. Metric ton of deer in the area, ridiculous (albeit temporary) commute through high deer accident areas at dusk and dawn. For less than $50/6 months, I felt it was worth keeping. I'd get a few grand for my car after accounting for the deductible, and it would go a long way toward a replacement vehicle. We have a ton of student debt, and are also looking to become homeowners in the next year, so it would suck to have to write Murphy's car dealership a check the same week as closing.
Title: Re: Auto Insurance Limits - what are yours?
Post by: mm31 on January 16, 2014, 11:08:53 PM
It's a struggle for me to keep my insurance under $600/year. I drive 2-3k miles/year, and have a high deductible. I have good credit. Is $600/year the lowest I can go?
Title: Re: Auto Insurance Limits - what are yours?
Post by: nottoolatetostart on January 17, 2014, 05:16:34 AM

Hi all;

My wife and I definitely need help on this.  I would like to know exactly what we should be getting on our cars and home as far as coverage limits goes.  The house is worth around 170k, the two cars maybe 20k each.

We're very close to FI (wife will retire this year) but we are paying a fortune in car and house insurance (3k annually).  I really need to know exactly what coverage I need to protect us from both natural and lawyer-made disasters.

We've called Progressive, Geico, etc and the numbers all seem to work out to be the same.  My wife and I have gotten one speeding ticket in 20 years.  No accidents.  No claims.  Great credit.  I assume we're over-covering because we're trying  to be safe.

Thanks in advance;
Pex

Hi Pex!  What are your vehicles and what are your current coverages and deductibles? And if you feel comfortable telling us, where do you live?  That can make an enormous difference.

We have 2 Hyundai's 2010 and 2011 - we're 300k/300k/100k I believe (looking for advice on this- we can change it ).
We live in Houston, TX

Hi Pex - DH and I are in your shoes exactly, except our 2 cars are worth $20K total from a quote I pulled from Kelley Blue Book and they are '09s.

$3K a year for house, umbrella, autos is insane in my book and that's what we pay too. ;0)

It seems like others have the $300K/$300K/$100K limits. I still think that seems so over insured. For our situation, seems overinsured considering we mainly use our cars to go within a 5-7 miles radius of our house (face punch, I know). DH has never caused an accident and I caused one in 2002. It was bad weather and I did not have anti-lock brakes, so I started hydroplaning and could not stop (love my ABS feature now on my car!). I am going to talk to DH about dropping comp/coll on my car at least (the $8K car).

We have enough in our emergency fund to buy a new car outright and want to get to a place of self-insuring.
Title: Re: Auto Insurance Limits - what are yours?
Post by: MissStache on January 17, 2014, 06:49:30 AM

Hi all;

My wife and I definitely need help on this.  I would like to know exactly what we should be getting on our cars and home as far as coverage limits goes.  The house is worth around 170k, the two cars maybe 20k each.

We're very close to FI (wife will retire this year) but we are paying a fortune in car and house insurance (3k annually).  I really need to know exactly what coverage I need to protect us from both natural and lawyer-made disasters.

We've called Progressive, Geico, etc and the numbers all seem to work out to be the same.  My wife and I have gotten one speeding ticket in 20 years.  No accidents.  No claims.  Great credit.  I assume we're over-covering because we're trying  to be safe.

Thanks in advance;
Pex

Hi Pex!  What are your vehicles and what are your current coverages and deductibles? And if you feel comfortable telling us, where do you live?  That can make an enormous difference.

We have 2 Hyundai's 2010 and 2011 - we're 300k/300k/100k I believe (looking for advice on this- we can change it ).
We live in Houston, TX

Your liability limits (300/300/100) have very little impact on your rates.  What is expensive are your first party coverages- collision and comprehensive.  You have two valuable cars, so that is what is driving your rates.  If you want to lower your premiums, you need to either get cheaper cars or raise your collision and comprehensive deductibles.  It is generally more expensive to insure in a city than in a rural area, so your location in Houston is definitely going to make it higher than it would be in other locations.
Title: Re: Auto Insurance Limits - what are yours?
Post by: nottoolatetostart on January 17, 2014, 11:55:16 AM
OK, we called our agent today. I made a few changes to our policy, raised deductibles, got rid of stupid things that were on our policy. We dropped 33% or close to $500 on our homeowners and a minimal change on the autos. We needed to keep our liability limits at a certain level due to umbrella insurance requirements.

Thanks all for the input!