Car insurance question

[nola79]

Would you keep full coverage insurance on a car that is paid off?
I paid off my 2003 Honda Accord several months ago. I dropped down to liability only, which saves us roughly $200 every six months.
The thing is, I am now worried about not being fully covered in case something should happen.
WWYD?

[pbjmama]

I used to use your method. But I don't anymore. Right now we would have to have a car payment if our car was totaled in an accident that was our fault. So $400 a year to keep me out of that is worth it to me. I can afford $400 a year, I can't afford $3000 that would be a car payment. Now that our cars are paid off I plan to put the 'car payment' amount in saving with the hope that we can pay cash for our next vehicle. Until we have enough to pay a reasonable amount of cash, I plan to keep full coverage.

[UberMama]

We decide based on how much our vehicle is worth. Currently, both of our vehicles are worth around $2-3k each. And while that is a chunk of change, we could afford it if need be. Now if they were worth 6-8k+ each, then they'd have full coverage (or at least our van would).

It's a fine balance between the worth of the vehicle and the difference in cost between liability and full.

[liberal_chick]

I'm with Ubermama. I recently paid off my car (a 2001 Honda Accord) and it is only worth about $2K. That is not worth carrying full coverage to me. We dropped down to liability.

[surrogate]

liability only on my 02 grand am...its worth 3k probably on a good day. Liability costs me about $250 a year total

[Kyamo]

Originally Posted by UberMama

We decide based on how much our vehicle is worth. Currently, both of our vehicles are worth around $2-3k each. And while that is a chunk of change, we could afford it if need be. Now if they were worth 6-8k+ each, then they'd have full coverage (or at least our van would).

It's a fine balance between the worth of the vehicle and the difference in cost between liability and full.

We have the collision because our paid off car is worth quite a bit. If it wasn't worth much, we would drop it. We do keep high deductible though ($1000) to cut costs.

[nola79]

Thanks for the responses! I'll have to look up the value of my car and go from there.
Also wanted to say, my mom's van was just totalled and she only had liability. She can't afford a car payment and is in a bad spot right now, so even more to think about.

[cschick]

Originally Posted by nola79

Thanks for the responses! I'll have to look up the value of my car and go from there.
Also wanted to say, my mom's van was just totalled and she only had liability. She can't afford a car payment and is in a bad spot right now, so even more to think about.

How much would she have gotten though, if she was carrying full coverage?

My husband's car was totalled and we only had liability. But it was totalled because the cost of repainting side panels and repairing the bumper (at "retail") was more than 75% of its worth. Even if we'd had full coverage, we probably would have gotten $700-$1000 at most for it. (Blue book value was $1300-$1500, we have a $500 deductible.)

Since we only had liability, we got to keep the car when it was totalled. For under $500, he's done the work that needed to be done to repair it.

[sunnysandiegan]

Hey, this thread reminded me to call my insurance agent to chat about this very topic! I've been meaning to do so for a couple months.

We have a 2004 Toyota Camry and a 2006 Prius. Both cars have titles in only our names (no liens). As of 9/2/10 on Kelley Blue Book dot com, our Camry is worth $7375-10,890 and our Prius is worth $9375-13,570 (range on both is from lowest trade-in to highest private party). The Camry is showing it's age in minor cosmetic ways while the Prius is still in perfect condition. We drive the Prius 75% or more of the time. Our agent just told me some interesting replacement facts about hybrids that I'll take with a grain of salt, but the gist was parts can be hard to find and more expensive than other Toyota parts (more specific to one exact vehicle). The flip side is the Camry is so popular that replacement parts are relatively low cost and easy to find (general parts can be used, as well).

Therefore, I dropped our liability coverage from 100,000/300,000/100,000 down to 50,000/100,000/50,000 and dropped the comprehensive and collision completely on the Camry only. We keep uninsured motorist coverage on all cars due to the area we live. San Diego has a high foreign student and foreign visitor (et al) population that tend to go without insurance for many reasons. Within the county, uninsured motorist claims are among the highest around. I kept everything the same as before on the Prius until I can research some facts myself, but mostly because we drive that vehicle the most by far.

We could either alter our lives and go with one car; or we could afford to replace one car in cash. Two cars at once (worst case scenario) would be much more challenging.

In any case, my one ten-minute (or less) phone call saved us about $100 every six months ($200/yr; $16/mo). Thank, OP, for posting!

[nola79]

sunnysandiegan- Glad I reminded you!
I looked up our vehicles on Kelly blue book, (DH's is also paid for) and I have decided to keep the liability only on my car. I do have uninsured motorists, and unisured motorists property damage. In our state, um only covers medical, so you have to have umpd to cover damage to the vehicle as well. We are keeping full coverage on DH's truck, as his is worth more, and he drives A LOT for his job.