What's your car insurance deductible?

[buildingmore]

I'm continuing to go through my budget and today I was looking at our car insurance. I'm considering moving the deductible from $500 to $1000. Has anyone done this and do you think it's a good move? What is the deductible on your current car insurance and how dis you decide on that amount?

[corn18]

$1,000. Been that high since 1987 when I first got insurance. I have saved way more than the few claims / issues I have had to pay the deductible. I have my house deductible really high as well (1% or $6,000). Haven't saved enough to cover that yet, but I just changed that.

[snafu]

If you have a good driving record, an older, paid off vehicle, stable employment with 3 months Emergency Fund to cover all basic expenses, you could look at the pros and cons of high deductible [$ 1K] insurance. If you needed to pay the deductible, could you? Ask your agent or broker the difference in premiums for the various deductibles, how many years do you anticipate keeping the car and the probable risk reward ratio.

There is no point in carrying more expensive insurance than the KBB value of your car. It has nothing to do with what you owe or what you expect. The reinsurers only pay their estimated value even if your car is pristine. I work from home, don't commute, drive a 2002 car for errands, so only have legally required 3rd party coverage to $ 1M.

[MonkeyMama]

Always the $1k deductible, or more often no collision or comprehensive at all. Firstly, because we have always had ample cash to cover the $1k deducible (or to replace our very modest vehicles entirely). Secondly, just based on a basic cost/benefit scenario.

It's always a bit of a gamble up front but after 22+ years without an insurance claims in our household we are happy with that choice and have come out way ahead financially. I do have accident prone friends who should probably never consider reducing their insurance.

[scfr]

I've nothing helpful to add to what snafu, tomhole, and MonkeyMama said. We also have either a $1K deductible (newer vehicle) or no collision/comprehensive coverage (older vehicle). We can cover the deductible or replacement cost.

On the post where you listed your debts, you included 2 pretty high car loans. Do you feel "stuck" with the cars for some reason? Could you downgrade? Spending less on a car frees up more cash to cover a higher deductible. It's part of a positive upward financial spiral.

P.S. - You are asking some really good questions! It's pretty clear that you are serious about improving your financial situation.

[bjl584]

$1000. The savings were significant to raise it from $500 to $1000. There really is no incentive to raise it up any higher. I had my insurance agent quote me rates if I had my deductible set at $1500 and $2000, and the rates were only a few dollars less per month than having it set at $1000.

[corn18]

A related question I have is when do you decide to drop comprehensive and collision insurance? I just got a quote from my insurance company (USAA) if I dropped all comp/collision and my monthly bill went down some depending on the car. $40/ month for the most valuable ($30,000 present value), $20/month for my truck ($14,000 present value). I would have to be accident free for 58 years to cover $14k @ $20 / month. As the car's value goes down with age, the cost of comp/collision goes down as well.

So why would I ever drop comp/collision? If my car was worth $2,000, I imagine comp/collision would be less than $10 / month. If I carried insurance with a $1,000 deductible, the comp/collision would cover $1,000 and the payback for that in savings would take 8 years. Seems like it would never pay to drop comp/collision if you are carrying a high deductible anyway.

Tom

[autoxer]

I'm continuing to go through my budget and today I was looking at our car insurance. I'm considering moving the deductible from $500 to $1000. Has anyone done this and do you think it's a good move? What is the deductible on your current car insurance and how dis you decide on that amount?

My deductible is $1000. One thing I noticed with having a high deductible, is that the loan company didn't like it so much. They started sending me letters telling me it didn't meet the loan criteria, so that was a little extra motivation to pay it off quick.

btw, buildingmore, I'm impressed with all of the questions that you are asking. You are systematically going through every single expense to see what is out of line. Most people would just throw their hands up and say there isn't any room to trim expenses.