Car Insurance: How much coverage is advised?

We are paying an astronomical amount for car insurance, and have not found significant savings shopping around. I am wondering if we may have more coverage than we need. What is advisable for liability, medical, injury etc?

Thanks in advance.

That depends on what you have to lose. If you have a lot of assets, insure as much as you can afford. If not, there is a principle of law called, "Judgement proof." You take the hit in the court and declare yourself bankrupt.

As for the medical, that is a different thing. You want yourself and family covered in case of serious injury.

It is not worth risking having to file for bankruptcy to save a few dollars a year.

of course not. That is not my aim.

I'm wondering what people typically do and if I, as a homeowner without a ton of liquid assets, am overinsured. Do people usually do 100/300 or 250/500 or what.

We are paying close to $6k/year for three drivers/cars (in Florida). This is serious.

I carry slightly higher than minimum coverages but I saved some money by doing the following:

I removed the comprehensive coverage once I finished paying off the car; kept collision.

Completed defensive driving every three years for every driver on the policy. That knocked a few dollars off the liability premium.

On the PIP medical I put my primary medical insurance first and auto insurer secondary. This saved a lot. If you put the car insurer as primary on the medical you will pay a huge premium for the privilege.

If you have any cars that are very old and paid off, consider carrying liability only.

Bundle the auto insurance with home owners insurance? Discounts there

HTH.

ETA: Consider increasing the deductibles. The higher the deductible the lower the premium. 

I never thought of doing defensive driving...great idea!

What does it mean to have collision w/o comp? I always thought of it as a single coverage.

Yes - we already have high deductibles.

Collision covers the car, if you hit someone, a tree a deer, total your car. Comprehensive covers some vain stuff like hail stones, paint but it also covers fire, theft and other things not related to you hitting something. I'm sure a Google search could prove more eloquent lol. But always keep collision unless the car is worth nothing.

You noted that you are insuring 3 drivers/cars. While you may be getting a multi-car discount, the driving records of any one of the three drivers may be affecting the rates you are being charged. Same with the kinds of cars you are insuring--I don't know the Florida market, but how car insurers calculate rates varies in different states (ie., value of car; claims experience of different types of cars [think SUV vs. performance vehicle vs. standard sedan]).

For damage I might do to other people I am insured up to my eyeballs. For damage that might be done to my car and that isn't covered by someone else's insurance (say I hit a tree) then it varies. Our one car is only worth about $2,000 right now, so paying extra for comprehensive and collision doesn't make sense. Our other car still has a blue book value of over $10,000 so that one is covered.

You say you have three drivers. I'm guessing/assuming one of them is a child. That is likely the bulk of your high costs, which means there isn't much you can do about it until that driver gets older. Teens are the most expensive, as everyone already knows, but even later you will still see drops in costs as they get older. We had a significant drop in premiums after my husband turned 40.

To add on to Spontaneous point, insurers, (i work for one) typically rate the highest at risk driver with the most expensive car. So just because you assigned (if you did) the hoopty $2K car to the younger driver, doesn't mean that's how the insurance will follow. It's shady I know but that's what they do.

I would keep the comprehensive coverage over collision personally. Collision is when it is your fault, so more preventable on your part (and likely more expensive.)

ElizMcCord said:

I carry slightly higher than minimum coverages but I saved some money by doing the following:

I removed the comprehensive coverage once I finished paying off the car; kept collision.

That's a great point. Can't really control theft. I never considered that.

sac said:

I would keep the comprehensive coverage over collision personally. Collision is when it is your fault, so more preventable on your part (and likely more expensive.)

ElizMcCord said:

I carry slightly higher than minimum coverages but I saved some money by doing the following:

I removed the comprehensive coverage once I finished paying off the car; kept collision.

Re collision and comprehensive coverage, check your car value and premiums and figure out how long it takes you to pay in as much as you would get back from the insurance company. That will help you decide when it makes sense to drop those coverages. A similar analysis may help you decide where to set deductibles also. (Higher deductibles will reduce your premiums and often "pay out" in a fairly short time.)

Re liability, you need to think about your net worth and you may also need to consider "umbrella" (excess liability) coverage because this is the coverage that is intended to protect you if you hurt or damage someone else. It has nothing to do with the value of your car, but everything to do with how deep your pockets are.

Re medical, it may depend on whether or not you and your family have adequate health insurance AND what your health insurance plan policies are with respect to claims for injuries related to car accidents.

Personally, I am over-insured in all aspects. But I sleep well at night. That being the case, again, when I had no assets, I was insured just 50k above the legal minimum. 

I could have insured at the legal minimum but felt responsibility to someone else's car/property if I hit them. At that time, new cars cost under $10k.

as far as collision/comprehensive...if the car is paid off-look at the value of the car and your deductible. consider if you are willing to risk the loss. if the car is worth $5000, you have a $1000 deductible...are you okay with a $4000 loss?

also get as high a deductible you are comfortable with.

talk to the insurance..say if you can't get a better deal you will have to take your business elsewhere. Mine went up $200 one year....I went back and forth with them and they just giving me canned responses that I should change my coverage to lower my cost..and eventually they offered me a long term customer discount which was close to the $200.

if you want to try defensive driving..look on Livingsocial and Groupon...you can get online classes really cheap...but also look at the savings for me its not worth it, but with 3 people the savings may add up to a few hundred per year (with the classes being about $50 total)

is FL a no fault state? Rates are higher in no fault states like NJ, leaving the consumer with few to zero options.

Thanks, everyone.

We own a Hyundai Elantra (08) outright, and that is my son's. He is 23 and an extremely responsible driver, but in December he went and had his very first accident (broke a little late, and got T-boned). A55hole.

A 2012 Prius that we bought used, and have one more year to pay off, and a leased Civic.

The premiums are freakin' killing me. About $450 per MONTH!

Doesn't matter how responsible he is, he's 23 and male, you're gonna pay through the nose for a few years to come.

450/month sounds about average for 3 people (1 young)/3 cars/ 1 accident..but I don't understand how braking a little late gets you t boned...sounds like he braked a lot late.

debby, when our sons were young, we got *some* relief by giving the insurance co. evidence of their grades, and then their college graduation.

For liability, you might also look into an umbrella policy that would cover all kinds of risks, and then carry less auto liability, if possible with your insurance company. However, recently we found that to get the umbrella policy we would have to carry more auto liability than we currently have....

And of course there's shopping around (which I haven't done in ages). Consumer Reports says that some companies actually charge more for people they don't think are likely to shop.

good luck with all this!  let us know what you find out.

One more thought - do you belong to any "affinity groups" ex your profession, employer, etc? Some have arrangements with insurers. My employer has discounts arranged with three insurers and I was able to save by moving both homeowners and auto to one of them. A friend who is a freelance musician was able to find some discounts through his union and a cousin who belongs to a society for audio engineers found a discount that way. Just a thought outside of the "normal" comparison shopping.

One thing to consider, perhaps radical, is to drive less, even if it results in less income. Do the math and see if it's worth trying.

If you are particularly concerned about liability, consider a large umbrella policy. They are not that expensive.

ElizM

Some years ago when I collided with an animal, not a deer, the damage was covered by Comprehensive. I had no Collision at the time. Check your policy.

That's news to me thanks for sharing. I wonder if collision is specific to "at fault" incidents. Leaving comprehensive for "all other". I'll definitely check it out.

mrmaplewood said:

ElizM

Some years ago when I collided with an animal, not a deer, the damage was covered by Comprehensive. I had no Collision at the time. Check your policy.

ElizMcCord said:

That's news to me thanks for sharing. I wonder if collision is specific to "at fault" incidents. Leaving comprehensive for "all other". I'll definitely check it out.

That's my understanding. Let us know what you learn.

mjc said:

For liability, you might also look into an umbrella policy that would cover all kinds of risks, and then carry less auto liability, if possible with your insurance company. However, recently we found that to get the umbrella policy we would have to carry more auto liability than we currently have....

"Umbrella" coverage is an add-on, not a replacement, for the basic liability coverage. So the insurance carriers will require a certain level of the basic coverage before writing the excess coverage or "umbrella" policy.

Discounts for having the homeowners and auto can knock off 10%.

and how much do you use your car for going to and from work which also adds a lot to a policy. As Tom points out below, there might be other options which might make sense (bike, moped, ride share, etc). I knocked off $300/year by finding an alternate way to get to the train station (walk to station, ask people for rides going home when the weather is bad).

Florida is a no-fault state. Our rates have gone up since my initial post, actually close to $500/mo now!

I'm not so sure my health insurance would allow it to be named primary for medical costs resulting from an auto accident...from what I have seen they have been getting quite aggressive about subrogation (pursuing other insurers for liability).

Would it make sense for me to take him off of our policy? I know his insurance would go up, but maybe our coverage for the other two cars would go down?