Questions About Car Insurance

[salilsurendran]

Hello Friends,
I have had no accident or speeding ticket. Have been driving in USA for more than 6 years and in India for another 3. I have been quoted $88/month for 50/100/100 coverage. I think this is pretty good compared to be previous coverage which jumped by $300 when I relocated to California. I had the following questions:

1. Do I need 50/100/100 coverage can I go for 30/60/25 given that I am a good driver and I am used to driving in India where traffic conditions are 10 times worse than here.
2. What is under insured driver protection needed for? If the driver is under insured I can still sue him and recover my money?He is liable for everything unless he hits and runs. Is the advantage of under insured driver simply that my insurance company will pay me and then in turn sue the person at fault.
3. My kbb value for the car is $15k . Considering that I am a good driver I don't expect any damage to the car to happen because of my fault so should I just drop collision and take comprehensive and under insured?

 

[BlockO]

if you want the short answer, you're better off lowering the premium by raising the comp and collision deductible and leaving everything else alone, including underinsured coverage. if you want the long answer, read on...let me answer those in order....

1. liability costs do not rise evenly in units, additional units become MUCH cheaper as you go higher. so it's NEVER a good idea to lower liability coverage. to drop from 50/100/100 down to 30/60/25 will only save you a few bucks and will greatly increase your liability exposure. It's not worth the added risk.

2. uninsured and underinsured coverage: some states combine them as one, some separate them. either way, they are BOTH very important. 1 in 6 drivers drive illegally without insurance, and many more than that only have minimal insurance.

" If the driver is under insured I can still sue him and recover my money?" .... yes you can, in theory. but if the driver does not have insurance or does not have adequate insurance, chances are that he/she does not have many assets that you could go after either. so suing them would do you no good. as we say here in America, "you can't get blood from a turnip".

do yourself a favor and take the UM & UIM coverage! It's a small percentage of the total premium and you may thank me for it someday.

3. Generally speaking according to the consensus, the time to drop collision coverage is when the kbb drops below $4000. dropping collision coverage on a vehicle worth 15K is CRAZY! I'm a good driver too (I've had 1 accident in 23 years), but I wouldn't dare drop collision on a 15K vehicle. are you kidding?

if you want to save money, I would suggest raising your deductible on your collision rather than the cuts you are considering.

 

[salilsurendran]

if you want the short answer, you're better off lowering the premium by raising the comp and collision deductible and leaving everything else alone, including underinsured coverage. if you want the long answer, read on...let me answer those in order....

1. liability costs do not rise evenly in units, additional units become MUCH cheaper as you go higher. so it's NEVER a good idea to lower liability coverage. to drop from 50/100/100 down to 30/60/25 will only save you a few bucks and will greatly increase your liability exposure. It's not worth the added risk.

2. uninsured and underinsured coverage: some states combine them as one, some separate them. either way, they are BOTH very important. 1 in 6 drivers drive illegally without insurance, and many more than that only have minimal insurance.

" If the driver is under insured I can still sue him and recover my money?" .... yes you can, in theory. but if the driver does not have insurance or does not have adequate insurance, chances are that he/she does not have many assets that you could go after either. so suing them would do you no good. as we say here in America, "you can't get blood from a turnip".

do yourself a favor and take the UM & UIM coverage! It's a small percentage of the total premium and you may thank me for it someday.

3. Generally speaking according to the consensus, the time to drop collision coverage is when the kbb drops below $4000. dropping collision coverage on a vehicle worth 15K is CRAZY! I'm a good driver too (I've had 1 accident in 23 years), but I wouldn't dare drop collision on a 15K vehicle. are you kidding?

if you want to save money, I would suggest raising your deductible on your collision rather than the cuts you are considering.

Thanks for the advice. I was thinking on the same lines as you were. I increased my collision deductible to $1000 and kept liability at 50/100/100.