Question for you Insurance Experts

[brucebotti]

I have an off topic question for you guys. What value does an insurance company use to determine the value of your vehicle.....NADA....Kelly Blue Book? Also, if they use one of those, do they go by trade-in value, private party value, retail (dealer)? The reason I am asking is that I'm thinking of dropping the collision on my wife's 2001 300M to save some dough.
Thanks,
Bruce

 

[tjkj2002]

It varies from company to company but most use fair market value for your area(retail).

 

[kb0nly]

I know when i discussed this with State Farm they gave me a couple options... One is standard which uses an average between NADA and KBB values based on zip code, and that data gets based off average sale prices reported. Kinda like how they review comparables when pricing real estate. I was told Trade-In Value is most commonly used and its also the lowest of the three, but it depends on your coverage, they could also use retail.

The problem is this takes the value of the vehicle at the time of the damage. So if you bought it new and then get totalled at say 50k then your only going to get replacement value for what you lost. Unless you get New Car Replacement coverage, which basically insures your vehicle for the cost of a new replacement rather than just buying something similar to what you lost. Costs a lot more though because your paying for new car insurance the whole time you own it...

I went with standard coverage...

 

[Robsama]

I'll chime in since I actually work at an insurance company.

Most companies use NADA to figure vehicle cost (Retail) since it is more accurate. Stealerships and body shops like to use KBB since their prices are usually inflated and doesn't take into consideration as much detail as NADA does (mileage, option packages, etc...).

If you're worried about how much damage it would take to total the car, it's usually 75% of the cars value at the time of collision. Older cars may have a higher threshold since the salvage amount will be less.

However I would suggest to NEVER drop collision. Find someplace else to save money. Increase your deductible and drop rental coverage. If you drop your collision, and someone hits you in a parking lot and takes off, you're not covered. Or if you're in an accident that's not your fault the other insurance company can d!ck you around and not cover the whole cost because "if you weren't out driving, you wouldn't have been hit by our driver." Trust me, things like that happen all the time.

I know the economy is bad and people are trying to save money every where they can. Ask yourself this before you drop the coverage. If someone hits your wife's car, can you afford to pay 100% of the repairs out of your pocket? If the answer is no, then keep the coverage. The easiest way to lower your monthly payments is to increase your deductible. Call your company's customer service department and find out what they can do for you to lower your payments. Or take some time to shop around. Also, if you have your auto (or multiple autos) and homeowners with the same company you can get a pretty good discount as well.

 

[kb0nly]

Yeah i second that...

Dropping collision is bad... No matter how bad off you are, you don't want to be making payments on a wrecked car. I actually know someone whos car got totalled and they only had liability. Still had $5k to pay on the car when it got wrecked. They are still paying on it and now also paying on its replacement.

I have State Farm, four life insurance policies, two auto policies, and my home policy. I pay $46 a month for full coverage and full glass on my KJ. 250 Comp / 500 Collision. After using the Comp coverage already for a deer hit, $1800 in damage, the deductible seems small compared. And last year my wife got hit in a parking lot in her car, $500 deductible on $2500 in repairs. The shop was willing to work with us on the remaining $500, they got a check for $2000 from State Farm and that left me owing $500, deductible taken from payment to the body shop. I made the last $500 in two payments, at least we still had a car!! I don't know what i would do if i had to try and pay for these damages.

Also lost her rear window to a total freak accident last year, neighbor hit rock with lawnmower and popped out rear window. Full glass, no deductible, did the whole thing online on the State Farm website, had phone call from glass shop and replacement done within two business days. Would have had it done next day but they had to order the correct glass as ours has the dark factory tint and they only had the clear in stock.

Insurance is not something you can skimp on these days. I always like to say, plan as best as you can, drive as safe as you can, but let insurance take care of the rest!!

 

[Marlon_JB2]

I've always been told never to drop collision until it comes to the point where your vehicle is worth less than the cost to insure it.

 

[kb0nly]

I've always been told never to drop collision until it comes to the point where your vehicle is worth less than the cost to insure it.

Good point... I have owned a few beaters that i had liability on.. If it got totalled it just wasnt worth it. We are talking like $1000 or less cheapos...

 

[Robsama]

Exactly. Until your car is worth less than your deductible or premium payments for the year, then keep full coverage.

 

[brucebotti]

Thanks for the info guys. I own all my cars outright, so that isn't an issue. It's just that I've been laid off for a year. I called the insurance company, and to take the collision off the wife's 300M would only save $100 per year. For that kind of savings, it's not worth the risk. I guess I'll just have to ration her beer to pick up the savings..(rotflmao)
Bruce

 

[Porkchop]

Not sure why but I found you can shop differnt agents in like state farm and can get lower pices for the same coverage. My old agent sold his and the price went up shoped other agents and it came back down?

 

[brucebotti]

Not sure why but I found you can shop differnt agents in like state farm and can get lower pices for the same coverage. My old agent sold his and the price went up shoped other agents and it came back down?

I've also found in the past that you constantly have to keep asking your agent to find ways to lower your costs. You would think that would be their job. When you tell them that you are thinking of moving to another company, they always seem to be able to come up with some savings. I can't complain too much. I pay $1,100 per year for my '05 Rene and my wife's '01 300M ith $500k liability and full comp and collision ($500 deductible).
Bruce

 

[Robsama]

Or you can go with a direct insurance company and bypass the agent completely. The reason some agents charge more for the same coverage is commission. However if you shop around yourself and check out companies that you can buy your insurance from directly, you'll always get the best price and could save a bunch of money.

Brucebotti - If you want to lower your premium quickly and easily, ask your agent how much you could save by raising your deductible to $1000. Then, when you find new work you can always drop it back down to $500.

 

[brucebotti]

Or you can go with a direct insurance company and bypass the agent completely. The reason some agents charge more for the same coverage is commission. However if you shop around yourself and check out companies that you can buy your insurance from directly, you'll always get the best price and could save a bunch of money.

Brucebotti - If you want to lower your premium quickly and easily, ask your agent how much you could save by raising your deductible to $1000. Then, when you find new work you can always drop it back down to $500.

Robsama,
I actually went direct a few years back after problems with my old agent. At the time I had three cars and a car trailer on my policy. The trailer was only $85 a year, primarily in case it got stolen. What I didn't know (and wasn't told), was that it was considered another vehicle and bumped up the cost on the other vehicles. When I contacted AARP (The Hartford), the person I talked to on the phone asked me how much the trailer was worth. When I told her $1200, she said it would be considered another vehicle, and it would be much cheaper to not insure it. I was paying an extra $500 a year for six years to cover a $1200 trailer.

I called on increasing from $500 to $1,000 on both vehicles. The savings was only $53, so I'll leave it as-is for now.

Thanks for your (and the others) advice.
Bruce

 

[LibertyFever]

Good discussion guys.

The first year I owned my Libby I had collision on it but I've since dropped it because I couldn't justify it. After reading these replies I'm beginning to rethink my decision. I also have a 95 YJ with minimal insurance coverage but it's a trail only rig. I can just imagine what it's "fair market value" is.

I apologize for hijacking this thread but I'd like to mention three more points to ponder;

One recent decision that I've faced with both my Jeeps is windshield replacement. My deductible is $200 and a new windshield doesn't cost too much more. I've decided to pay for my own windshield replacements rather than making a claim and risk raising my rates.

I've known of people who have had their modified vehicles "written off" as the result of an accident and they've received a check from their insurance company for the "fair market value" of their vehicle alone, not all the accessories they've installed. I wonder if you can add extra coverage to an insurance policy?

Never mention that you've modified your vehicle to an insurance company. I've known people who simply can't get insurance coverage because they've lifted their vehicles and put bigger tires on it. Of course not all insurance companies are biased against modified vehicles.