Do I need Collision Coverage?

[JanetJackson]

Hi Y'all.  Trying to figure out if I need Collision and Comprehensive Coverage on my Auto Insurance policy which renews on 9/7/2018 or if I can drop it.

Costs to me are in Green..  My current Vehicle Savings bucket is growing at a regular +$50/month rate (with occasional additional bigger chunk-deposits if I get a good payday at the side hustle, etc.) and currently at $2,200. 
I have a separate savings bucket for insurance.  The Vehicle bucket is for re-purchasing a vehicle and for major repairs. 

My Car:
2010 Toyota Matrix Hatchback KBB Value $6,000 (purchased a year-ish {ten months?} ago for a little over $5,500)

Current Geico breakdown:
Current 6 month Premium with student discount, safe driver, union discount, etc. etc. is $335.96


Bodily Injury Liability
$25,000 per person/$50,000 per occurrence
$112.10

Property Damage Liability
$25,000 per occurrence
$123.31
 
Uninsured Motorist Bodily Injury
$25,000 per person/$50,000 per occurrence
$13.56
 
Uninsured Motorist Property Damage
$25,000 per occurrence
$5.45

Comprehensive
Deductible: $2,500
$16.15

Collision
Deductible: $2,500
$65.39

[ixtap]

I have too much satire in my life, I read that as collusion coverage.

That is a huge deductible, so your coverage is really only worth about $3k... I think most who are open to going without )my otherwise frugal husband refuse to drop it) would say you can go without.

[JanetJackson]

I have too much satire in my life, I read that as collusion coverage.

That is a huge deductible, so your coverage is really only worth about $3k... I think most who are open to going without )my otherwise frugal husband refuse to drop it) would say you can go without.

Right, but I was thinking my savings needs to exceed that 3k in order for it to be sensible to drop it? Or no?

[ixtap]

I have too much satire in my life, I read that as collusion coverage.

That is a huge deductible, so your coverage is really only worth about $3k... I think most who are open to going without )my otherwise frugal husband refuse to drop it) would say you can go without.

Right, but I was thinking my savings needs to exceed that 3k in order for it to be sensible to drop it? Or no?

Is that the entirety of your taxable accounts, or just what you have designated as a car fund? How long until you have a solid emergency fund saved up? What are your transportation options if something happens to your car?

[seattlecyclone]

I don't think your savings needs to match your current car's value if you'd be willing to replace it with a cheaper one if needed. The key question is: if your car was totaled tomorrow and you got nothing from insurance, would you be okay? Or would you need to run to a bank and take out an expensive loan for a replacement? If the former, you can go without the insurance. If the latter, keep it.

[JanetJackson]

I have too much satire in my life, I read that as collusion coverage.

That is a huge deductible, so your coverage is really only worth about $3k... I think most who are open to going without )my otherwise frugal husband refuse to drop it) would say you can go without.

Right, but I was thinking my savings needs to exceed that 3k in order for it to be sensible to drop it? Or no?

Is that the entirety of your taxable accounts, or just what you have designated as a car fund? How long until you have a solid emergency fund saved up? What are your transportation options if something happens to your car?

No, that is not the entirety of my taxable accounts- I do bucket style savings, so I have a fully funded EF that would cover current (non barebones) expenses for four months, funds for medical needs, funds for my pet, funds for everything else, etc. Not a ton overall and they flux as bills come due, etc, but I do have accessible taxable funds.  I have a house down payment fund locked up in a CD as well.  Maybe 15-20k overall if I had to pull from nearly everything taxable. 
 
I have access to a work car that I would owe $0.20/mile reimbursement for.  I've used it in the past when I was between vehicles. 
I live too far from job #1 to bike, but could bike to Job #2, Job #3 is questionable biking distance.

[BicycleB]

Right, but I was thinking my savings needs to exceed that 3k in order for it to be sensible to drop it? Or no?

Is that the entirety of your taxable accounts, or just what you have designated as a car fund? How long until you have a solid emergency fund saved up? What are your transportation options if something happens to your car?

No, that is not the entirety of my taxable accounts- I do bucket style savings, so I have a fully funded EF that would cover current (non barebones) expenses for four months, funds for medical needs, funds for my pet, funds for everything else, etc. Not a ton overall and they flux as bills come due, etc, but I do have accessible taxable funds. I have a house down payment fund locked up in a CD as well.  Maybe 15-20k overall if I had to pull from nearly everything taxable. 
 
I have access to a work car that I would owe $0.20/mile reimbursement for.  I've used it in the past when I was between vehicles. 
I live too far from job #1 to bike, but could bike to Job #2, Job #3 is questionable biking distance.

Drop it is my suggestion. 

SeattleCyclone nailed it. The key is do you have resources to buy replacement car. You do, plus you have other backup (work car).

The buckets are super for ensuring all needs are accounted for. The danger in overspending a bucket is the temptation to buy new things beyond the buckets. Your decision here is to cut your costs, not buy something extra. IMHO it's therefore ok to use total reserves, not just the bucket, to backstop the risk.

PS. In my state, uninsured is optional; it pays for cases where my property or body is damaged. But my health insurance pays for my medical anyway, and the risk to property is a risk I can handle. Maybe you could also eliminate the uninsured property coverage because you can afford to self insure, and perhaps the uninsured medical because it's redundant? (Depends on details of your state and case; just asking).

[seattlecyclone]

Agreed that you should take a look at the uninsured motorist coverage if you get rid of comprehensive or collision. Collision insurance pays for your car if you get in a wreck that's your own fault. Uninsured motorist coverage pays for your car if you get in a wreck that's someone else's fault but they don't have sufficient insurance to pay the full cost. Seems to me that you should probably have both or neither, but not just one.

[terran]

I'm with SeattleCyclone. If you could somehow afford the loss (do without, or buy a cheaper car) then drop it.

You might want to look at increasing the liability coverage though. That's pretty low. We have $300/300 plus $1M umbrella. If you lose your $6000 car, not a big deal. If you get sued after an accident you could lose everything you have plus have to pay out future earnings, which is a big deal. Insurance is important for things that would be a huge problem, less important for things that aren't

[Counting_Down]

PS. In my state, uninsured is optional; it pays for cases where my property or body is damaged. But my health insurance pays for my medical anyway, and the risk to property is a risk I can handle. Maybe you could also eliminate the uninsured property coverage because you can afford to self insure, and perhaps the uninsured medical because it's redundant? (Depends on details of your state and case; just asking).

I disagree.  If someone causes an accident that renders you in horrible medical condition, your insurance covers the discount on the pricing but you're on the hook for all the payments.  Under/Uninsured covers the payments for it.  YMMV, but if I were already dealing with the physical/mental affects of para/quadriplegia - I sure wouldn't want to be paying for it too if it was someone else's fault.  I've known several people who've been in horrific car accidents caused by someone else, and not only have the costs been staggering (500K/1MM) to save limbs, both are huge advocates for proper under/uninsured insurance coverage.

[seattlecyclone]

PS. In my state, uninsured is optional; it pays for cases where my property or body is damaged. But my health insurance pays for my medical anyway, and the risk to property is a risk I can handle. Maybe you could also eliminate the uninsured property coverage because you can afford to self insure, and perhaps the uninsured medical because it's redundant? (Depends on details of your state and case; just asking).

I disagree.  If someone causes an accident that renders you in horrible medical condition, your insurance covers the discount on the pricing but you're on the hook for all the payments.  Under/Uninsured covers the payments for it.  YMMV, but if I were already dealing with the physical/mental affects of para/quadriplegia - I sure wouldn't want to be paying for it too if it was someone else's fault.  I've known several people who've been in horrific car accidents caused by someone else, and not only have the costs been staggering (500K/1MM) to save limbs, both are huge advocates for proper under/uninsured insurance coverage.

Citation needed. I'd be shocked to find out that any medical insurance plan I've ever had excluded coverage for automobile injuries. I have never seen anything about that in the plan documentation I've been provided. Sure, if the injury is someone else's fault the medical insurance company is absolutely within their rights to try to recover costs from that person or their insurance company. But to not cover it at all? That doesn't add up.

[Counting_Down]

There's two sides to insurance, whats gets paid if it's your fault, and what gets paid if it's someone else's fault.  I want to protect my assets if it is my fault against getting sued for everything.  I also want to protect my assets if someone else causes damage that has the potential to bankrupt me. 

Bodily Injury Liability  - This is if you cause the accident.  If there are 4 ppl in the car, max payout per person is 12.5k. You can be sued for the difference if you have assets in excess.
$25,000 per person/$50,000 per occurrence

Property Damage Liability - This is if you cause the accident.  This won't cover a tesla or a beemer or most new cars.  You can be sued for the difference if you have assets in excess.
$25,000 per occurrence
 
Uninsured Motorist Bodily Injury - This is if they cause the accident.  If you and your mom are in the car, the max insurance will pay to save both your lives is 50K. You can sue if your costs are greater, but if they didn't have enough money to get proper insurance, do they have additional assets?
$25,000 per person/$50,000 per occurrence
 
Uninsured Motorist Property Damage.  This is if they cause the accident.  Your car is worth 6k, so you're ok here, unless you carry 19k worth of stuff in your car.
$25,000 per occurrence

Comprehensive - Anything happens to your car, you pay 2.5K to get it fixed (think tree limb crushing, robbery w/ broken windows).
Deductible: $2,500

Collision - In an accident that's your fault, you can pay 2.5k to repair damage to your car.
Deductible: $2,500
[/quote]

[seattlecyclone]

Agreed about having higher liability limits if you have some assets to lose. It sounds like the OP only has about $15-20k in assets at risk, so perhaps a bankruptcy wouldn't be the end of the world at this time. You do need to be aware that keeping low liability limits does put you at real risk of bankruptcy in the event that you're at fault in a car crash. Weigh this risk against the extra money you might spend to increase your insurance, and make a decision that allows you to sleep at night.

[Counting_Down]

PS. In my state, uninsured is optional; it pays for cases where my property or body is damaged. But my health insurance pays for my medical anyway, and the risk to property is a risk I can handle. Maybe you could also eliminate the uninsured property coverage because you can afford to self insure, and perhaps the uninsured medical because it's redundant? (Depends on details of your state and case; just asking).

I disagree.  If someone causes an accident that renders you in horrible medical condition, your insurance covers the discount on the pricing but you're on the hook for all the payments.  Under/Uninsured covers the payments for it.  YMMV, but if I were already dealing with the physical/mental affects of para/quadriplegia - I sure wouldn't want to be paying for it too if it was someone else's fault.  I've known several people who've been in horrific car accidents caused by someone else, and not only have the costs been staggering (500K/1MM) to save limbs, both are huge advocates for proper under/uninsured insurance coverage.

Citation needed. I'd be shocked to find out that any medical insurance plan I've ever had excluded coverage for automobile injuries. I have never seen anything about that in the plan documentation I've been provided. Sure, if the injury is someone else's fault the medical insurance company is absolutely within their rights to try to recover costs from that person or their insurance company. But to not cover it at all? That doesn't add up.

It appears I wasn't clear.  Your health insurance will cover it, but you are responsible for your portion of the costs under your plan (ie: copay at 50% for all costs exceeding your deductible up to your ~oop max(?)).  If your health insurance won't cover an experimental surgery to save a limb, you pay for that 100%.  The difference here is that if you have under/uninsured from your car insurance , your car insurance pays for it and sues the other car insurance company to recover costs (unless there isn't one, and no assets to sue for, which sucks for them, but thats why they charge premiums).  I'm not familiar with health insurance companies suing car insurance companies for reimbursement? I suspect you're just SOL if someone caused you major injuries. Yes? No?  This is my understanding after extensive conversations about proper insurance coverage - with experts and the above noted people who've had need to use this kind of coverage. Paging @merula.

Health insurance is contract negotiation these days.  Having insurance gets you in on their negotiated pricing.  Payment needs to be made for the remaining cost.  The discussion here is who pays - you, or the person that caused the accident, or your car insurance company.

[seattlecyclone]

It appears I wasn't clear.  Your health insurance will cover it, but you are responsible for your portion of the costs under your plan (ie: copay at 50% for all costs exceeding your deductible up to your ~oop max(?)).  If your health insurance won't cover an experimental surgery to save a limb, you pay for that 100%.

Oh sure, no argument there. Underinsured motorist coverage can pay your medical deductibles and lost wages due to being out of work, and anything else that liability insurance would normally cover.

My response to that is the same advice I always give about insurance: buy it if not having it would be a financial disaster for you. Skip it if you can afford to eat the cost yourself if something bad happens. If needing to pay your medical deductible in the case of a car crash would cause a financial disaster, that means your medical deductible is too high. Sure, buying underinsured motorist coverage provides a band-aid for this high medical deductible in the narrow case where you get in a car crash and an uninsured driver is at fault, but what about all the other cases where you might end up in the hospital and no other insurance will cover it? Best to just lower your medical deductible and forget about the band-aid insurance.

[Counting_Down]

@seattlecyclone - idk.  A guy I know got into a serious crash - broke both legs horrifically.  Stellar health insurance, but the underinsured coverage saved the day in getting him walking again, 2 years off work and continuing physical therapy for the foreseeable future.  I think there's a place for that kind of coverage. That's really my point here.  Perhaps moreso than the other kinds - there's a limit to property damage and your bankruptable assets.  But your body...yeesh.

[seattlecyclone]

If he had instead broken both legs in a skiing accident, would he have been royally screwed? That's my point here: you need broad-based insurance against things that would cause financial disaster. That means general-purpose health insurance, disability insurance, life insurance, liability insurance. If you're adding extra coverage for injuries from car accidents only, you're either insuring yourself more than you need for that circumstance, or insuring yourself less than you need for all other possible circumstances that could lead to injury or disability.

[JanetJackson]

Thanks for all of the input y'all! 
Uninsured motorist is required in my state, so I can't drop that. 
I'll look into all of the other suggestions- thank!
Maybe raising my coverage elsewhere but dropping my collision/comprehensive.  I don't have a lot to lose, but I've really fought for what I have.  I don't own enough to half fit the smallest truck they rent at uhual, BUT I do also have horrible horrible health insurance with an 8k deductible.... so lots to think about.
Thanks friends.

 

[nick_mmm]

I would echo sentiments of others-- having survived a major car accident in which the 'at fault' driver had state minimum insurance (30K liability).. Consider increasing your limits. I doubled all of mine after the accident, at the huge expense of...... $24/year.

I had 100K under insured coverage; which just barely covers medical expenses owned to my health plan under a subrogation lien. This all gets complicated; but I wish someone had told me to up my limits years ago, I would much wealthier today.. at the cost of $24/year...

[Fireinthebelly]

I would drop it. Since the car is only worth 6000 and you have a 2500 deductible, the only time you would benefit is if you total your car.  In that case you are only out 3500 more than if you didn’t have insurance.  So you are paying 80 to insurance against a maximum 3500 loss