InfiniteNothing

So what's the best way to dermine how much insurance to buy?
$35K? $100K? $300K? $1000K?
What about collision and comprehensive? I've been doing this insurace things for years but I've never really had any logic to it.

In some ways it seems like you are betting against yourself by buying more insurance and in other ways it seems smart to protect ones self from certain risks. It's a zero sum game in the end so does it really matter?

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VTGreg

I would say it depends on your net worth. If you don't have much in the way of assets then you couldn't lose a ton of money if you were in an accident that did not have the damages covered by your insurance. Currently, I just have the minimum, but am looking at bumping up the coverage a bit for some cya.

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InfiniteNothing

That makes some sense. But think about this, lets say you have very few assets like say $15K, you have $35K insurance, if you cause $50K damage (seems easy to do), you're still going to be sued for $50K and lose your ass. If you had $50K insurance you'd walk away and dust your hands off. Here the more insurance the less risk of losing everything.

Now if you were like a millionaire it probably makes sense to buy as little insurance as possible (holding $35K bond). At that point you can afford to lose big money. Since it's a zero sum game, you end up winning in the long run because of the overhead fees/ brokerage fees associated with an insurance company.

So it kinda seems that the more money you have the more you can afford to lose so you should have less insurance.

Then again, if you had just turned 16 and had no assets... pft... what do you have to lose.

RIVERWIDOW

I think it depends alot on your car. Is it new and unpaid for? Shouldn't you have enough to pay it off if you total it. My kid just wrecked his year old focus and luckily he had Gap insurance. That pays off your car if you total it and owe more on it then its worth.

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InfiniteNothing

The car is paid but I'm not in a place where I could easily replace it. At this point it's probably smart to have collision/comprehensive but once I can afford a new car... is it worth the peice of mind?

And that still leaves liability insurance. Liability coverage covers everyone but the insured (and his/her car) on at fault accidents. It would be all to easy to make a mistake and total a $50K car or cause a neck injury which comes with big medical expenses.

RIVERWIDOW

Insurance is like husbands. You hate like hell to pay to have it but when you need it-car accident or mouse in bathroom- you are damn glad you have it. Because if you don't it sucks big time. Bottom line I think its better to have it and not need it than to need it and not have it.

DarkFury

That covers you.. but what about the stuff you damage with your car...

For the most part... the LAW requires "liability" regardless if you have enough insurance to cover your own car. So more or less... the "minimum" is determined by how much damage you'll potentially cause and can be sued for. After that... you consider how much your car is worth and cover additional for that.

And don't even start on those "uninsured" and "under-insured" drivers.... Mo $$$, Mo $$$, Mo $$$

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InfiniteNothing

But, correct me if I'm wrong, you can always be sued for what you're worth + how much you have in insurance.

mcs328

Get the uninsured motorist. I got hit in November and I'm still not done but I didn't have to pay for the rental which was several hundred bucks. I also got rental b/c I didn't have it before. I might lower my comp deductible to maybe like 50.

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DarkFury

Ya can't squeeze blood from a turnip...

But on a side note... it pays to be covered in case of lawsuit. Some insurance policies nowadays cover you up to like 1 million in case of a lawsuit... but it's not like I'm actually worth that kind of money to be covered to that amount.

Thing is... try not to ram your car into a truck carrying a full shipment of brand new Bentleys.