Car insurance questions

[Permanent Temp]

I just paid off my car and I'm trying to figure out what if anything I should drop from the insurance.

The car is worth about 4K if I traded it in I'm not sure what the value would be if it was totaled out. It has 85K on it and isn't driven more than 5-10 miles a week. It is under warranty until early next year. I have 3K in an emergency fund so that's all I could do to for repairs.

What should I have for insurance on the car? What do you have for insurance for your car?

[bjl584]

If you drop to liability only, then you are taking a gamble if it gets wrecked. There goes your EF and then some to replace it.

I'd keep collision on it if I were you. I've always thought of liability insurance being reserved for your second beater car that you don't care about so much. It shouldn't be for your primary means of transportation. Especially if you only have 3K in the EF.

[bzbee]

We never had any loans on our cars, we bought them used. We always had the liability only with the uninsured motorist coverage. That way if the accident is my fault, I do my own repairs, if it's the other's person's fault, I am covered whether they are insured or not. We have 4 cars with AAA and pay $1100 a year plus $55 or so for the AAA membership. It is usually cheaper to pay a yearly payment than pay monthly.

[riverwed070707]

Congrats on paying it off!

Agree with BJ. Definitely wouldn't drop to liability unless it wouldn't put a damper in your budget to replace it if it was totaled. If you're trying to cut costs, maybe bump your deductible to $500 or $1000.

What kind of car is only worth $4k with 85k miles?? Seems low.

[Permanent Temp]

Congrats on paying it off!

Agree with BJ. Definitely wouldn't drop to liability unless it wouldn't put a damper in your budget to replace it if it was totaled. If you're trying to cut costs, maybe bump your deductible to $500 or $1000.

What kind of car is only worth $4k with 85k miles?? Seems low.

Thanks for confirming that for me as far as not dropping to liability. My husband stated something about letting go of full comprehensive? I don't know what that means.

It is sad I only have a 3K Emergency Fund but I'm coping. It would have been more like 6-7K but emergencies did come up. Plus I've paid off about 8K off debt between the car and the credit cards and 5K for a wedding last year. Not too shabby.

The car is a 2008 Chevy Cobalt so its not worth much. But 4K is trade in value. I'm not sure what is is worth if I sold it privately or if it was totaled out. I think they still sell for 7K at a dealership but I don't know since the recall they haven't been allowed to sell them as far as I know.

[riverwed070707]

Thanks for confirming that for me as far as not dropping to liability. My husband stated something about letting go of full comprehensive? I don't know what that means.

It is sad I only have a 3K Emergency Fund but I'm coping. It would have been more like 6-7K but emergencies did come up. Plus I've paid off about 8K off debt between the car and the credit cards and 5K for a wedding last year. Not too shabby.

The car is a 2008 Chevy Cobalt so its not worth much. But 4K is trade in value. I'm not sure what is is worth if I sold it privately or if it was totaled out. I think they still sell for 7K at a dealership but I don't know since the recall they haven't been allowed to sell them as far as I know.

Total comprehensive usually refers to insurance covering accidents, damages and medical costs incurred due to an accident whether its your fault, someone elses fault or weather/storm related. If you drop to liability that means your insurance only covers damage related to accidents that are your fault, which is required by law in most states. A lot of people choose to drop to liability when they drive an older paid off car (if it has a loan the lein holder usually requires comprehensive coverage) to save costs because they aren't, for example, going to go get dents pulled out for looks after a hail storm. But you also aren't covered if you get hit by an uninsured motorist and some other scenarios as well. You might do some reading and maybe it will be a consideration once you boost your efund back up.

[humandraydel]

Comprehensive covers the value of your vehicle if you cause an accident. I pay $9 per month for a vehicle that is worth about $5k. So it seems worth it to me. But go ahead and call your insurance agent and ask how much you will save if you drop comprehensive.

[Petunia 100]

My insurance agent says comprehensive is for anything that can happen to your car which is not a collision. Like a truck on the freeway throwing a rock (his example).

Accidents can happen to anyone. Insurance is to cprotect you from losses which would be financially catastrophic. If you cause an accident and your car is totalled, will that be a big deal to you financially or not? If it would be, keep your full coverage.

[ua_guy]

My thought is, if you're ready to replace your car at replacement expense to yourself tomorrow, and if you are in possession of the vehicle's title, then consider dropping comprehensive and collision coverages.

Comprehensive coverage is usually the cheaper of the two, and if you're a good driver, it covers the higher risks of loss to you- windshield damage, vehicle theft, animal encounters, vandalism, etc and might be worth keeping around for those reasons.

If the car is not equipped with side curtain airbags I'd put my money into increasing liability limits as well as personal injury protection if I had to stay within a budget for insurance premiums.

[snafu]

Cobalt is a special problem but I too would retain comprehensive but increase deductible to $ 1,000. Be sure to get your vehicle checked from stem to stern a couple of months before the warranty expires. Keep on top of the recall and issues being identified for that vehicle.

[redcab13]

You need to think carefully which kind of insurance really suits your needs. Liability is the cheaper but it only covers the other party one as far as I know. If you are able to afford then go for a full coverage. Try to research more about it.

[Drake3287]

The problem with paying for full coverage on an older car that's not worth a ton of money is that if you get into an accident, both parties insurance companies aren't going to pay to fix it if the damage is more than what it's worth. Even a minor rear-ender might cost more to repair then to total it. And the insurance company is only going to give you what Kelly Blue Book says it's worth, not what you might be able to sell it for.

My daughter's older Honda Civic was rear-ended and the cost to repair it was more than what KBB says it was worth even though on the open market we could have gotten more for it.

[creditcardfree]

I would keep your insurance the same. We dropped to liability on a paid off car one time and my husband had a medical incident several months later and crashed into a building. The insurance did cover the damage to the building, but obviously not our car, the tow truck, impound fees. It was not good. I will never do that again, it isn't worth it.

[purplish]

Don't you need it, legally? Be sure you know local policy before dropping insurance like that. I know in Virginia its illegal to drive without it (at least it used to be). I would just make sure I'm not overpaying. There are apps to do that now. Several people I know have used the insurance toad app but I'm sure there are other ones out there as well.