Liability insurance? What to do?

Alaska

Saved by grace
O.G.
Mar 19, 2007
9,512
19
Barrow, Alaska
Since the dawn of time we have had a car payment due and just recently - like three weeks ago we are finally able to say that 'that hunk of metal is ours'

Now- do I lower the insurance to just liability? Or would that be a stupid move? Just thought I'd ask my fellow TPFers what they did when their last payment was made ...? Keep the full coverage or go with the liability?
 

shoefan

O.G.
Jul 10, 2006
457
2
I've never linked paying for a car to needing less insurance.

Could you absorb the cost to replace/repair your car if it was stolen or damaged?
 

glamgirl84

Member
Sep 10, 2007
1,721
0
You would only lower your insurance if your car is now worth so little that its not worth paying insurance for repairs if you get in an accident. Keep your insurance!
 

Odette

<3 life
O.G.
Aug 20, 2007
11,449
2
www.twitter.com
Depends on what kind of vehicle you have.

Basically, if the vehicle would not be worth anything after your deductible, then it's not worth keeping the collision coverage. However, many vehicles keep at least a couple thousand in value even at an older age/high miles, so it's worth keeping the collision coverage should you ever be in an accident.
 

amanda

I Bleed Georgia Red
Oct 18, 2005
11,341
15
35
New York City
www.purseblog.com
Depends on what kind of vehicle you have.

Basically, if the vehicle would not be worth anything after your deductible, then it's not worth keeping the collision coverage. However, many vehicles keep at least a couple thousand in value even at an older age/high miles, so it's worth keeping the collision coverage should you ever be in an accident.
Agreed. The worth of your car should be the determiner of whether you keep full coverage insurance, not whether or not you're still paying for it. If the value of your deductible is lower than the average resale value of your car, keep your full insurance. If your car is very old, inexpensive, or in bad condition, then it may not be worth it to pay your deductible to repair it. In that case, only minimal insurance is worth it.
 
Sep 13, 2007
6,114
3,731
The prairies of the Midwest
In car insurance your coverage is split into the following categories:

Collision -- which pays for repair to your car, but only up to the Blue Book value
Liability -- which pays for repair to someone else's car and possibly their medical expenses, etc.
Medical payments
Uninsured driver -- In case the other driver has no insurance
Under-insured driver -- In case the other driver has inadequate insurance.

If your car is an old beater and the Blue Book value is lower than most car repairs you can get rid of the collision. The insurance company will not pay you more than the car's Blue Book for your repair.

You don't want to get rid of the other types of coverage though. In fact most states require that you maintain minimums of liability coverage in each of those categories.

In fact you might want to consider adding to your car insurance what's called an "umbrella liability" coverage. If you get into a major accident this will help protect your business, home and savings when the injured parties (and their health insurance company) sue and go after everything you own. Typical umbrella policy is for $3-$5 million and it costs only a couple hundred dollars a year extra.
 
liability (bodily injury and property damage) should always be sufficient to cover your asset not matter what car you drive.
Uninsured/underinsured motorist bodily & property injury limits, don't cost much premium, protects you AND passenger.
to save premium, ask your agent to go over the list of discount such as day time running light, front&side airbag and your annual milage usage.
for cars over 7 years old, the actual cash value is usually pretty low, so decline the collison is not a bad idea. I suggest you keep the comprehensive as it protects you against fire, theft, etc.