I have a personal story about insurance on older cars. Clark says to drop comprehensive and collision on older cars, which does make sense. Let me tell you my story:
I was hit in the rear while stopped at a traffic light. I did get the driver’s contact information and went to the police station to file a report. I spoke to the driver’s insurance company and they told me that the driver did not return their calls, so they would not pay. I ended up filing a claim on my own collision coverage. Several months later my insurance company sent me a check for the deductible. Good to have the insurance company on my side!
I would have filed a complaint with the state’s Department of insurance with a copy of the police report. I would have sent a copy of that letter to the adverse driver. Depending on the amount of the damage to the car I may have used a small claims court to file suit against the adverse party.
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Depends on how much the car is worth, and how much premium you pay, and how good you are at avoiding crashes.
I’ve been in one damage-causing crash in 48 years of driving, which was also not my fault.
If my car got totaled, I don’t think they’d give me more than a few thousand. $3000?
But the comp/coll coverage is $100 a year for me… because of the low value of the car and my driving record.
I don’t see large motivations to drop or keep in my case. But all of my crashes, even the ones that did not result in damage have occured AFTER the iPhone was released, people have turned into absolute Scheisse drivers, so I guess I’m keeping it as a potential $3,000 lottery ticket?
Yes, you can always sue them in civil court.
The current batch of drivers is the worst ever.
For someone like Clark who has cash on hand to likely buy any new or used vehicle he needs, it may make sense to drop comp/collision on an older vehicle, HOWEVER, in my years, it has been my observation that BAD THINGS NEVER HAPPEN AT A GOOD TIME!
Sure, they may not pay me much for my older car, my comp & collision policies for mine and husbands are around $400 a year, but I feel like WHATEVER amount they pay is better than nothing and will go towards the purchase of a new car. Maybe the math won’t exactly add up, but I’d rather have the $3,000 or 7000 or whatever they’ll pay than to have to take all of it out of my car savings account or have to finance a new used car. Sadly, for much of the lower income people in the U.S. they are told this so they drop those policies and when/if it is their fault, they end up in total financial distress or ruin over what would be a minor inconvenience for someone like Clark. If it is your ONLY METHOD OF TRANSPORTATION, you should ALWAYS make sure you buy the rental policy and buy the comp & collision policies so you can get something to put toward another vehicle. The “experts” don’t always take into account the reality that poor and lower income people face when they lose their only way to work, it can often cost them one or both of their jobs if they live in an area where public transportation isn’t available or not feasible for them because of children, etc. That $100 they pay could save their lives.
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I don’t disagree with you… but you kind of say (without saying it) “even if it’s a bad deal economically, get comp/coll insurance anyway because at least you get something”.
Putting it that way makes it sound like payday lending.
I don’t want to blame poor people for being poor, but the system is set up (and they agree to participate in it… no one forces you to do it) to keep them poor.
If someone saves enough to buy a beater, they escape that entire cycle.
No, they don’t if they’re in an accident. The situation that most poor to lower middle income folks face is that if/when they are in an accident, they may/may not have alternate transportation available, may not be able to afford to just go buy another vehicle and the situation can quickly go from having a bad day to ruining any chance of financial stability they may be working toward. If you work a minimum wage job or three these days and manage to finance a cheap older vehicle and pay it off, it may only be worth 5 or 10k but if you wreck it and the insurance pays you even 3-5k you have something to go either put a down payment towards a new vehicle or a used car outright, if you don’t have any savings you’re out of luck. Even if you do, it could wipe it out. The chances that someone on the lower end of the income scale will have other means of reliable transportation is usually slim. Then they risk losing their car, any savings they’ve accumulated, their job(s) so it can truly be a devastating financial loss as opposed to a person with a savings, good credit and other vehicles parked in the driveway. I don’t carry rental coverage because I know we have 3 other vehicles for 2 people, but if it was my ONLY car, I’d have it in a minute for the $40 it costs a year! Point is, insurance has never been designed for people with “means” it was designed for those who don’t have the means should the unthinkable happen like an auto accident, a house fire, earthquake, fire, flood, tornadoes, etc. Sadly, because of the abuse of the system and the godawful weather patterns the last 20 years, it has become cost prohibitive and claims heavy making it a luxury for many. I still stand by my post, however, if you are not able to run out and buy another car cash tomorrow, CARRY THE COMP & COLLISION… you can thank me later. Penny in AL