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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: $200k on October 31, 2013, 03:19:44 PM

Title: Dropping Collision and Comprehensive on my car
Post by: $200k on October 31, 2013, 03:19:44 PM
Hi,

My wife owns a 2008 Versa with 120K miles.  It has an apparent book value of $5,750, but probably lower due to some bumper damage.  The bi-annual cost for comprehensive and collision is $186 (or $372 annually), with a $1,000 deductible.  So, if the car was totaled, insurance would pay out no more than $4,750.

She has never totaled a car before (in her 30s).  Her commute is 26 miles RT.  I am thinking of dropping collision and comp.  What do you guys think?  Is this a no-brainer? 

If the car were totaled, and I did not have collision and comp, I would simply pick up another used economy car for around $4,000 that I have in my emergency fund.
Title: Re: Dropping Collision and Comprehensive on my car
Post by: jba302 on October 31, 2013, 03:29:11 PM
Over time, risk transfer always costs more for the transferor compared to retaining the risk. If you can eat the risk and have the appetite for it, it's statistically worth it.
Title: Re: Dropping Collision and Comprehensive on my car
Post by: TrMama on October 31, 2013, 03:40:34 PM
I have a similar car and insurance premium. I dropped collision and comprehensive this year.

Additionally, since I'm in BC, if the car is damaged in an accident that's not my fault, then the other person's insurance will pay to fix/replace the car. I'm only out the entire cost of the vehicle if I total it AND I'm at fault. Certainly possible, but it further reduces my financial risk.

Also, I saved $80/year since I no longer use it to commute to work :-)
Title: Re: Dropping Collision and Comprehensive on my car
Post by: Cecil on October 31, 2013, 03:47:48 PM
Additionally, since I'm in BC, if the car is damaged in an accident that's not my fault, then the other person's insurance will pay to fix/replace the car.

Isn't it like that everywhere?
Title: Re: Dropping Collision and Comprehensive on my car
Post by: burly on October 31, 2013, 04:33:34 PM
It is in the US too.
Title: Re: Dropping Collision and Comprehensive on my car
Post by: Eric on October 31, 2013, 05:12:44 PM
I personally think it's a good idea, but there are others who disagree in this thread:

https://forum.mrmoneymustache.com/ask-a-mustachian/collision-and-comprehensive-auto-insurance/
Title: Re: Dropping Collision and Comprehensive on my car
Post by: jawisco on October 31, 2013, 08:03:15 PM
I would drop it unless your wife is a really bad driver.  Self insure is the way to go whenever you can afford it...