Is Full Coverage Worth It?

[aleung1649]

Hi, I currently owns a 2007 Toyota Camry, bought it for 20k new in 2006. I live in an apartment with a garage. I drive 7500miles per year mainly during the weekends.

Some questions:
1-I am paying 2k per year for full coverage in NYC. Am I overpaying?
2-Is full coverage necessary? I am thinking about switching to liab. coverage.

Thanks

 

[Fisher]

So, are you hot?

 

[BTFuzz]

Hi, I currently owns a 2007 Toyota Camry, bought it for 20k new in 2006. I live in an apartment with a garage. I drive 7500miles per year mainly during the weekends.

Some questions:
1-I am paying 2k per year for full coverage in NYC. Am I overpaying?
2-Is full coverage necessary? I am thinking about switching to liab. coverage.

Thanks

On a 2007? Yes, raise your deductibles to eat some of the cost.

 

[Newby]

To determine that you need to figure what the annual savings is with going liability only. It might be $1,200 for instance.
Then figure out how much your insurance company would pay you if you totaled your car. KBB values will give you a rough guideline.
Subtract the amount you save from the amount they pay you. That is the amount you would come out ahead if you have a claim.
Now you just need to determine how important that amount of money would be to you if you totaled your car yesterday.

 

[b61mack]

the problem with not having full coverage , is if someone hits you. you will have to go after the other guy, "if you want peace of mind. get full coverage."

 

[djs]

Can you replace your car if something happens? In NYC, its not a matter of if you have an accident, but simply when.

If you can afford to replace your car without any help from the insurance company, then you can consider going liability only. If you don't have enough money in the bank to write the check, insurance is a good backup.

Changing deductibles is a good place to look if you want to save some money. This isn't always the bargain it sounds like, so have your agent work on this for you. If possible, use a split deductible, keeping the comp deductible lower than the collision deductible. Comp coverage is pretty inexpensive and worth having in the city.

If you have a loan on the car, then the bank will require that you have comp and collision coverage. You can only entertain the idea of liability only if the car is paid for.

Dan

 

[Indiana_Adam]

Something that new, yes, you should carry full coverage. As DJS states, if there is a lien, they won't allow you to go liabilty only. Most will allow you to raise your deductibles to $1,000. When the loan is paid off and the car is several years old...sure...go liability only.

Lastly, buying a brand new car is a rip off. Good for dealerships and insurance guys, bad for the purchaser.

 

[Insurance-Guy]

Lastly, buying a brand new car is a rip off. Good for dealerships and insurance guys, bad for the purchaser.

When it comes to Insurance this is not exactly true many companies are giving new car discounts...so the insurance is actually cheaper many times on a brand new car than it is on a older car of the same style. I have replaced many cars and people are always shocked when they get a new car and their price drops...

And as far as bad for the purchaser...that is I guess up to the purchaser. I personally don't mind purchasing a new SUV or Car...and having my corporation take a huge deduction? I also love my SUV too...MPG's not so much!

 

[Tampa Bay Rep]

Because of how much a new car depreciates I've seen some financial "gurus" advocate buying a car a couple of years old but you are taking a chance on an older car.

 

[BTFuzz]

And as far as bad for the purchaser...that is I guess up to the purchaser. I personally don't mind purchasing a new SUV or Car...and having my corporation take a huge deduction? I also love my SUV too...MPG's not so much!

I agree...when I buy a new truck, I get the heavy equipment tax deduction that far outweighs any savings I'd get from a truck just a few years old...gotta be 6000lbs though.