Author Topic: car insurance - what can go?  (Read 4892 times)

scrubbyfish

  • Guest
car insurance - what can go?
« on: April 02, 2014, 05:19:10 PM »
I may be ditching the car altogether in a few months, but in the meantime...

I pay annually, and it's due in a few days.
In BC, there is only one insurer, so shopping around is not an option.
I receive the maximum (40%) "discount" for no incidents.

Current invoice is $1547.

What aspects are reasonable to let go of on a 4 year old, $20000, car?

Basic Coverage $869
$2mil third party liability
$150,000 accident benefits, hit and run, underinsured motorist

Optional Coverage
-increase third party liability to 3mil $164.00
-collision ($300 deductible) $314
-comprehensive ($300 deductible/$200 windshield deductible) $102
-roadstar $20

Excess underinsured motorist $25
Vehicle license fee $53

CarDude

  • Pencil Stache
  • ****
  • Posts: 611
  • Location: Chicago, IL
  • Beep Beep!
    • The CCD
Re: car insurance - what can go?
« Reply #1 on: April 02, 2014, 05:27:05 PM »
I've frequently recommended folks drop to minimum coverage once they could afford to replace their vehicle the following day with cash from savings.

Milspecstache

  • Pencil Stache
  • ****
  • Posts: 507
Re: car insurance - what can go?
« Reply #2 on: April 02, 2014, 05:28:16 PM »
At least go for the $1000 deductible!

GoldenStache

  • Stubble
  • **
  • Posts: 239
  • Location: Washington, DC
Re: car insurance - what can go?
« Reply #3 on: April 02, 2014, 06:31:48 PM »
$3 mil is excessive for coverage, is BC worse than the US in lawsuits? 

Not sure what Roadstar is but if it is like AAA you can drop it on a $20k car.

Raise all of your deductibles to $500 min, would suggest $1k. 

Thegoblinchief

  • Guest
Re: car insurance - what can go?
« Reply #4 on: April 03, 2014, 06:46:10 AM »
Drop the optional coverages except comprehensive. Raise the deductible on the comprehensive.

Buy a cheaper car next time and insure it for only basic.

electriceagle

  • Bristles
  • ***
  • Posts: 480
Re: car insurance - what can go?
« Reply #5 on: April 03, 2014, 06:58:34 AM »
Insurance is for low-probability events that you could not possibly handle yourself (or for cases where insurance company investment returns > your investment returns such that the "real, risk adjusted" premium = 0).

Keep high liability limits. If you critically injure one young person while on the road, their lifetime of care could easily reach $3MM. If you are Mustachian, odds are that you own your own house and have a lot of money in the bank. Those assets are big targets that need to be protected.

The value of uninsured motorist depends on where you live. In some parts of the US, 20% of drivers have no license (and therefore no insurance). I don't know if this is common in BC.

What is the replacement cost for the car? How many years of collision coverage is the car worth? Do you have cash to replace the car out of pocket if it is damaged?

nawhite

  • Handlebar Stache
  • *****
  • Posts: 1060
  • Location: An RV somewhere in the West
    • The Reckless Choice
Re: car insurance - what can go?
« Reply #6 on: April 03, 2014, 11:15:42 AM »
There are 3 categories I like to think about with insurance:
1) I messed up and am liable
2) Someone hit me and I need a new car
3) Someone hit me and I have medical expenses

Your auto liability coverage covers 1. Look into lowering your coverage to like 300k and then get an umbrella policy to protect you back up to $2 million. Its usually a better value.

Category 2 will be taken care of as long as the other person has insurance. If they don't, your uninsured motorist coverage kicks in. Note though that the benefit in this category is capped at the value of a new car so why do you have $150k in coverage here?

Category 3 will be taken care of by the other person's insurance too. If they don't have coverage, you'll be taken care of by your health insurance. My answer may be different in Canada because I don't know enough about healthcare there but in the US, I have health insurance to pay for this. You don't have this but some people pay for "medical" benefits with their car insurance which is dumb in my opinion because you have health insurance for that.

Also note that Category 2 disappears if you have an emergency fund that can buy a car or fix your current one. So you may be able to ditch uninsured motorist.

Also, get rid of windshield coverage. I just had mine replaced and it cost $197 which is less than the deductible on your policy.

Can you take a safe driving course to get a discount? I've gotten 20% off before for taking one of those.

scrubbyfish

  • Guest
Re: car insurance - what can go?
« Reply #7 on: April 03, 2014, 02:31:26 PM »
Thanks, everyone!

I called the insurer (ICBC), too, and learned as much as I could there.

One of my questions to them was one since brought up here, "But if someone is injured, doesn't our BC Medical cover the health costs?!?" They said BC Medical only covers some things. This is true, and in my opinion unfortunate, but I doubt ICBC would cover things BC Medical doesn't considered a valid remedy.

I believe the 2mil liability is required in BC, but I'll check.

In BC, all vehicles are required to have insurance, but that doesn't mean everybody does. We do have a fair amount of vehicle-related crime here (theft, uninsured, hit and run, etc). The first $150,000 for underinsured is required. (This is for vehicle repair/replacement but also medical costs.)

If the car was totalled, I do have cash to replace it. But I wouldn't. I wouldn't fork over $20,000 for a car in my current circumstance (four years ago things were infinitely better). I would just go without for some months first and, if I determined I needed one, I would get something cheaper. But even I could stand to go without, I think I'd still want a car this new/costly to be replaced by insurance. i.e., I'd rather pay $100/yr toward replacement than $20,000 to replace it myself. If I didn't need the replacement car, I could at least sell it. Am I misunderstanding something here?

I will call a service centre and ask about windshield replacement costs.

I haven't yet read of a discount for having a safe driving course, but when I looked up the extra discounts, I saw one for disability, which I appear to be eligible for. This will be 25% off! So I'm pursuing that. Not one of the ICBC agents mentioned this, despite my question, "What else can I do to reduce this?"

I don't have property/house/massive amounts of money to protect.

A car is a tough call for me. I LOVE having one after 17 years without, and I LOVE having one that just works all the time! I got terribly burned (financially) on a previous purchase: $3000 for one that constantly broke down, cost me $300 for each repair with no results, etc. I figure unless I can learn mechanics or get really savvy with the repair guys, an imperfect car is just a lot of frustration and expense for me.

scrubbyfish

  • Guest
Re: car insurance - what can go?
« Reply #8 on: April 04, 2014, 12:16:10 AM »
Met with broker.
Cannot reduce 2mil liability or $150,000 underinsured.

Seems about $300, give or take $100 depending on where we go, to replace windshield.

Don't know how to paste in a table, but here are the options for deductibles:

Deductible          300               500          1000              2500
Collision              314              272            231                169
Comprehensive  102                 76             49                  24

Thoughts? Seems so little savings to potentially pay out $1000 or $2500, no?

Argyle

  • Pencil Stache
  • ****
  • Posts: 909
Re: car insurance - what can go?
« Reply #9 on: April 04, 2014, 12:44:08 AM »
Yes, but really you're betting on how likely it is that you'll have an accident.  And how likely that you'll need to replace your windshield.   Don't fall into the trap of thinking that an accident is inevitable.

nawhite

  • Handlebar Stache
  • *****
  • Posts: 1060
  • Location: An RV somewhere in the West
    • The Reckless Choice
Re: car insurance - what can go?
« Reply #10 on: April 04, 2014, 07:55:25 AM »
Yes, but really you're betting on how likely it is that you'll have an accident.  And how likely that you'll need to replace your windshield.   Don't fall into the trap of thinking that an accident is inevitable.

So lets use the $1000 deductible as an example. You would save $136 every year that you had a $1000 deductible vs a $300 deductible. $1000-$300 is $700. $700 \ $136 is 5.15

So if you think you will have an accident that is your fault (you don't have to pay the deductible if the other person is at fault) causing more than $1000 in damage in the next 5.15 years, then get the $300 deductible. If you think you are more than 5 years away from causing an accident that causes $1000 or more in damage, then get the $1000 deductible and put $136 into an account every year to be your "emergency deductible" money. After you have $700 in that account, add that $136 to your savings every year from then on.