Should I buy collision insurance?

[dragonwalker]

Hey everyone,

Hope you had an enjoyable holiday.

My new auto policy is coming up for renewal in it's first 6 month cycle. I am currently insured with Geico and paid $427 for the first 6 months, it will now be $417 for the next. My coverage for liability is 50/100, I have a $500 comprehensive deductible, uninsured motorist coverage, roadside service, but no added rental coverage.

Adding collision would be another $222 dollars with a $500 deductible. My commute time is usually quite moderate maybe averaging under 9,000 a year. However as of last August I have driven for Uber and lyft part time on weekends and I estimate that at the rate I drive, my annual mileage may be closer to 15,000-20,000. While driving for these companies though, if I were to get in an accident, I would not be covered by my insurance however these ride sharing companies do have their own insurance. When I think about it I really only would have a problem if I had an accident with a passenger on board because otherwise I could use my own insurance and there would be no way they would know the difference.

I drive a 2009 Honda Civic that currently has 52,000 miles in the greater Los Angeles area. I have a clean driving record. 6 months ago I did shop around for insurance and went with Geico because they were affordable and a large carrier. I have this belief that a large carrier will be easier to work with as far as getting my claims processed than a small, no name company (this is what an underwriter at one of these small insurance companies told me). Tell me what you guys think if I should add it or not.   

[Ohio Teacher]

It depends if you have enough in emergency savings or a car fund to self-insure should you have an accident.  Personally, my answer would be no.  I've never had collision coverage on a car, even when my car was only 6 years old as yours is currently.

[I'm a red panda]

I drop collision when the blue-book value of my car is under $5000.

Does your insurance company know you drive for Uber? I've heard a few people say that once they started doing that they were required to get commercial insurance, even though Uber covers them when the passenger is in the car, and therefore stopped doing that.

[woodnut]

I also drop collision once a car's value drops below $5000 and until that time, carry the maximum deductible the insurance company allows which is $1000.  I don't know your financial situation but I couldn't sleep at night with that low of liability limits.

[Dr. A]

I also drop collision once a car's value drops below $5000 and until that time, carry the maximum deductible the insurance company allows which is $1000.  I don't know your financial situation but I couldn't sleep at night with that low of liability limits.

+1 on both of these. Totally your call based on your own risk tolerance, but 50/100 can get wiped out quickly, and if you have a significant stash, it may be at risk. As for collision, I stick religiously to the rule "if I can afford to replace it, I don't insure it". Since I have the cash to buy a new car tomorrow, I don't carry collision, and wouldn't regardless of miles driven or what I do with my car.

Hopefully you've also carefully researched Uber's insurance policies and understand exactly how you're covered. A lot of zipcar users were surprised a few years back when a bunch of stories came out highlighting how crappy the liability coverage actually was.

Just because Uber says "you're insured" doesn't mean you are insured appropriately.

[Mr. Green]

If you have substantial assets you need to raise your liability coverage. Any lawsuit you face will be going after personal assets with coverage that low. Stuff happens and there's no way to predict the future.

Personal example: My father was riding a bike and got clipped by a drunk driver. No broken bones thankfully but he was thrown and knocked unconscious. He spent less than 24 hours in the hospital and the bill was $30,000. Liability coverage of the insured was only $25,000. Fortunately for that person, her net worth was nonexistent or there would have been a lawsuit.

[Scandium]

Why do you only have a $500 deductible? That's crazy low. I think i set mine to $1k or $2k. I dropped collision on our one car since it's worth <$5K, but kept it on the other one that's worth north of 10.

You do also know that you can change your coverage at any time right? You don't have to wait till renewal, they will prorate you the amount. I have geico as well so I know they do.

[sabertooth3]

My coverage for liability is 50/100, I have a $500 comprehensive deductible, uninsured motorist coverage, roadside service, but no added rental coverage.

If you're going to increase anything, I'd increase the 50/100 to 100/200 and increase your deductible, as others have suggested. I don't think that it would cost that much to your premium to increase your liability limit, but if you ever do get hit with that, the extra $50k/$100k could really go a long way to preserving your stash.

[jba302]

While driving for these companies though, if I were to get in an accident, I would not be covered by my insurance however these ride sharing companies do have their own insurance. When I think about it I really only would have a problem if I had an accident with a passenger on board because otherwise I could use my own insurance and there would be no way they would know the difference.

This is the correct situation. When you don't have a passenger on board, it would be your own insurance (although discussing this with some adjusters, it's questionable at what point it would not be. Some say the moment you turn on the app, some say once your accept a route). With a passenger on board, it's Uber's. California is the exception to this AT THIS TIME, see this link- http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140AB2293. This is supposed to require commercial coverage from initiation to drop off, which essentially means that the commercial policy can't deny the claim. However, I could see Uber black-balling anyone who has an accident prior to a pick up and requiring their coverage.

I will say this, I would absolutely love to get at this data. It would completely change an auto insurance book of business.