Here is a chart of the different prices I was quoted for different options from Geico. (BI = Bodily Injury, PD = Property Damage, MED = Midical, UI = Uninsured motorist, COMP = comprehensive and COLL = Collision). The BI and UI went to higher levels, but Geico told me that I had requested too many quotes before I could fill in the whole chart!
Most people are probably pretty familiar with auto insurance terms. I am not. I've never shopped for insurance and had no idea what 15/30/5 meant. Luckily, all the insurance sites did a good job of explaining these terms, and there was also a nice article at the Smart Money site that covers the basics.
To determine the level I need, I checked out emunds.com, which recommends:
General recommendations for liability limits are $50,000 bodily injury liability for one person injured in an accident, $100,000 for all people injured in an accident and $25,000 property damage liability (that is, 50/100/25) given that half of the cars on the road are worth more than $20,000. Here again, though, let your financial situation be your guide. If you have no assets, don't buy excess coverage.
Ok, simple. I don't have much for assets, but to go from the state minimum of 15/30/5 to 25/50/25 was only about $40 over the course of six months, so i decided to buy up. In particular, the property damage liability was cheap to increase, so I did. There are a lot of expensive cars in this city, and $5000 wouldn't begin to repair most of them. As my assets increase, I suppose my coverage levels also would have to increase. I threw in uninsured motorist coverage, just in case. I declined medical (i have medical insurance), roadside assistance and rental coverage.
Now it was time to look at the expensive stuff--collision and comprehensive. For $45 for six months, comprehensive seemed like a good bet. My parents car was stolen last year, and they were kicking themselves for not carrying comprehensive insurance. The next question I was faced with was the biggie: do I want collision insurance? My car is about 8 years old. It's a Dodge Stratus with 80k miles on it. Oh, and it has a salvaged title. It's not exactly a junky car, but it's defintely not nice either. I looked up the Kelly Blue Book Value, and at most it is worth $3400. They won't do an estimate for the salvage title, so it is defintely worth less than that. The cost of the highest deductible ($1000) is $144.00 for six months. For that I'd be getting about $2000 worth of coverage.
Reasons not to carry collision:
- I have an emergency fund that could buy a cheap car of similar (or better) value
- I put a line item in my 2008 budget for a new(er) car fund
- It isn't recommended to buy collision/comprehensive if the premiums cost more than 10% of the amount of coverage you are getting (value of car - deductible)
Reasons to carry collision
-I've never driven in a city this large before, and I'm a little nervous about it
-I haven't been in an accident since I was a teenager, but I'm not the worlds best driver
-I can afford it in my budget.
I decided that for the first six months to one year living here, I'm going to carry collision insurance. Then I'll re-evaluate my options. At that point, if I'm still driving this car, I'd probably drop it. Also, the difference in price for $500 deductible versus a $1000 was almost negligible. Even though I'm generally a fan of higher deductibles (or rather, the lower premiums that come with them), I chose to go with the $500 deductible.
Now that I know exactly what I want, I'm going to see if I can get it for a better price. At first glance, Geico seems to have a really good price, but I want to check a few others before committing.
1 comment:
When I got off my parents' car insurance policy, I just purchased car insurance through the same company and with all of the same things that they carried! :) I'm glad to see that you're taking it a lot more serious than I did.
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