Is it worth it to keep full coverage on a car that's paid off?

[The Sum of Awe]

It's probably worth no more than $2000 if even that now.

 

[Revoltingest]

It's probably worth no more than $2000 if even that now.

I wouldn't carry full coverage on it.
The yearly cost is high relative to
the value of the car, but the
probability of using is low

 

[The Sum of Awe]

I wouldn't carry full coverage on it.
The yearly cost is high relative to
the value of the car, but the
probability of using is low

What about injuries in accidents? Or people who are not insured on the other end? I do have health insurance, so perhaps I wouldn't need to worry about my own injuries, and liability would cover the other's injuries. Right?

 

[Revoltingest]

What about injuries in accidents? Or people who are not insured on the other end? I do have health insurance, so perhaps I wouldn't need to worry about my own injuries, and liability would cover the other's injuries. Right?

By "full coverage", I assumed covering
collision damage repair, or payment
for a totaled vehicle.
Insurance varies by state. So the other
aspects in yours are unknown to me.

 

[ChristineM]

It's probably worth no more than $2000 if even that now.

I would, i just don't ttust other drivers.

 

[Shaul]

There are several factors. Liability is important to keep. Medical coverage protects you from medical claims of passengers who are injured. It also covers funeral costs. Property coverage protects you from the loss of your car itself.

If you don't have many assets and are "judgement proof" you should only get the minimum liability insurance. I hope that isn't your case. Anyone who has assets you can't afford to lose by claimants you should get more liability insurance. That is not an area to scrimp on.

If you always drive alone and have separate coverage for health and funeral expenses then you don't need medical coverage. Most people have separate health insurance. But if you transport others often, say you drive members of the little league to and from games, then it is a good idea.

The property coverage is the type you can consider cutting, or even deleting. If the value of the car is low enough that you could afford to write it off, then this coverage is useless. However the amount "saved" by cutting it should be directed to saving up for the replacement car. This assumes you will want another car when this one is no longer serviceable.

 

[SalixIncendium]

It's probably worth no more than $2000 if even that now.

On a car of that value, I would just carry liability.

Whether or not one should choose to keep full coverage on a car with no lien would depend on the car's value. A good rule of thumb is if your annual premium meets or exceeds the policy's payout limit, it's better to drop the collision and comprehensive and just keep liability.

 

[Orbit]

The point of insurance is that you never know what will happen. I would keep full coverage.

 

[Quintessence]

As some have alluded to, it's not the car being "paid off" that is relevant, it is what the replacement value of the car is. If the replacement value is assessed low, there's rarely much point to full coverage - only need liability and medical.

 

[The Sum of Awe]

Thank you for the info everyone.

 

[Revoltingest]

I carry only liability on Mr Van, even though
I've about $20,000 invested, not including
spendy contents. If he were totaled, no
insurance company would see his value as
much lower.
So if he's ever totaled, I'd just buy & modify
another vehicle...using the savings of not
buying full coverage for many years.

Of course, medical & liability insurance are
covered.

 

[SalixIncendium]

I carry only liability on Mr Van, even though
I've about $20,000 invested, not including
spendy contents. If he were totaled, no
insurance company would see his value as
much lower.
So if he's ever totaled, I'd just buy & modify
another vehicle...using the savings of not
buying full coverage for many years.

Of course, medical & liability insurance are
covered.

Book value on my car is around $25,000.

I would not consider putting it on the road with liability only even though I have that option. It would take about 25 years of premiums to equal what it would cost me to replace the car if it was a total loss.

 

[Revoltingest]

Book value on my car is around $25,000.

I would not consider putting it on the road with liability only even though I have that option. It would take about 25 years of premiums to equal what it would cost me to replace the car if it was a total loss.

That makes full coverage a good value.
Especially if replacing a totaled vehicle
out of pocked would be difficult or
impossible.

Mr Van also doesn't do any commuting,
which strikes as more prone to accidents
than my infrequent highway travel.
I deserve a big discount on insurance!

 

[We Never Know]

It's probably worth no more than $2000 if even that now.

Liability and comprehensive is what I would carry on it.
Comp will cover theft, hail damage, water damage, hitting a deer, etc.

 

[Brickjectivity]

If you have time to look (hard) you can still find a good vehicle with low miles that costs under $2000. No doubt it will require repairs of some kind and a paint job and probably will have termites; but that's better than paying $10000.

So liability + medical + plus look for an extra vehicle. If something goes wrong you can switch to your other one.

 

[Watchmen]

My umbrella policy requires a certain level of coverage.

 

[JIMMY12345]

It's probably worth no more than $2000 if even that now.

Life lessons. If you maintain full coverage. You will never have an accident and also never get back your expensive premium. However as soon as you reduce your premium to the extent your pay-out is negligible. Someone will run into the next day.