Author Topic: How much car/home insurance do you even need?  (Read 4475 times)

purplish

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How much car/home insurance do you even need?
« on: November 30, 2013, 12:48:13 PM »
My insurance guy upped my coverages, to cover everything, but honestly I don't even know what's necessary or not.  I have a condo, a car, and a rental home.  I live in MA which means ins. is more expensive... but I don't know what's needed or not, and of course I don't want to lower my coverage and then be liable if something happens.  Is there a website that explains this type of things or gives advice?

Bakari

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Re: How much car/home insurance do you even need?
« Reply #1 on: November 30, 2013, 02:05:13 PM »
There are threads here that cover this question in depth if you search.

For the car - liability only.  Possibly more than the legal minimum, but driving slower and more carefully is better than insurance.  If your car gets totaled, you can buy a used car for a few thousand.  Full coverage will cost you a few thousand within a few years.  If you total your car every few years you shouldn't be driving.

Ziggurat

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Re: How much car/home insurance do you even need?
« Reply #2 on: November 30, 2013, 02:13:55 PM »
I'm sure there are websites to explain it, but insurance is quite simple: the purpose of insurance is to cover a loss that you can't afford.  It is a way to pool risk of unlikely (but financially catastrophic) events across many people.

How much insurance to hold and what deductibles to use, depends on your ability to cover the loss if it were to happen.  Similar to what Bakari said, for an old car that is worth a few thousand dollars, for example, if you have $40,000 sitting in the bank, you don't need to worry about insurance to cover the loss of the car - you could afford to replace it in the unlikely event it was totalled.  For more expensive things like houses, you can raise the deductible (saving you money on premiums) to a level that you can afford if your house was destroyed or severely damaged.

Liability insurance is (in my mind) somewhat separate from other types, as liability settlements can be very large, for example if someone is injured and sues for years of lost income. No one except the very rich could afford to cover those losses, so you should always have liability insurance.

NinetyFour

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Re: How much car/home insurance do you even need?
« Reply #3 on: November 30, 2013, 03:07:58 PM »
I don't mean to hijack this thread, but I am interested in the same topic.  I would like to go to minimal insurance on my (paid for, 10 year old) Tacoma, but next year, I will probably be purchasing a Four Wheel Eagle camper for it.  I plan for the camper to be fairly permanently installed on the truck--and, as I do now, I will drive it only when I head out of town.  Should the addition of the camper cause me to carry more than just minimal insurance? (I will pay cash for the camper.)

Like the OP, I also have a rental, and I'm not sure I ever told my insurance company that I have a tenant in my main house (I live in the accessory dwelling).  I think I will call my agent next week and have a chat.

Snow White

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Re: How much car/home insurance do you even need?
« Reply #4 on: November 30, 2013, 03:53:31 PM »
I have not bought comprehensive insurance on a car in 20 years because I could afford to repair it or to replace it if necessary.  I am basically "self-insuring" instead of relying on a company to do it for me.  I do buy liability insurance because you can't easily self insure against the possibility of being sued for millions (unless you are VERY wealthy).  I buy home owners insurance because while I technically could absorb the loss of my home and buy another, it would hurt.

In a nutshell, you buy insurance only to protect from a financial risk that you can't or are unwilling to accept yourself.

brewer12345

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Re: How much car/home insurance do you even need?
« Reply #5 on: November 30, 2013, 04:32:31 PM »
Insuring a car, especially a low value one, for comp and collision is a waste of money.  Don't bother.  Liability insurance is another matter.  Lawsuits are for real and you do not want to skimp on coverage.  Unless you are a pauper, you should have an umbrella policy for at least $1MM of coverage and whatever liability limits on home and car are required to get the umbrella.  I keep a $2MM umbrella myself and I sometimes wonder if I should not up it.

Bakari

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Re: How much car/home insurance do you even need?
« Reply #6 on: November 30, 2013, 05:00:12 PM »
I don't mean to hijack this thread, but I am interested in the same topic.  I would like to go to minimal insurance on my (paid for, 10 year old) Tacoma, but next year, I will probably be purchasing a Four Wheel Eagle camper for it.  I plan for the camper to be fairly permanently installed on the truck--and, as I do now, I will drive it only when I head out of town.  Should the addition of the camper cause me to carry more than just minimal insurance? (I will pay cash for the camper.)

RV insurance is different.
I don't know about a truck camper, but for both my motorhome and my trailer, fulltimers insurance covered comprehensive, collision, liability, AND the sort of things a homeowners policy covers, like liability if someone hurts themselves on your property and covering your stuff if anyone breaks in.
I think the policy for my trailer was about $300 a year (and I got much more back from them, between a windstorm that took down an antenna, a wheel blow out that damaged the body, and a shed break in that cleared out most of my tools and bicycles)