I had a serious car accident today, and now what with my BRZ?

[Grady]

Originally Posted by Dave-ROR

Wow.. that's legal there? Plenty of uninsured motorists here but it's not legal so someone doing that here has extra legal issues/tickets to deal with also.

Self insuring in the USA is legal. You have to be able to prove that you have the assets/cash to cover the requirements. It only makes sense in very large companies. When I worked at Raytheon our company van had a legal letter in the glove box stating so. The company I work for now pays around $45k a year for $1M in liability for their vehicles. They do not insure the vehicle.

Once again it is a financial decision for the individual. Everyone’s salary, savings, tolerance for loss is different.

[Grady]

Originally Posted by Sasquachulator

IMO The car has to be a completely worthless shitbox to switch out from full coverage to liability only. 5k is still a lot of money to just throw away. Im not sure how many 'stages' of insurance there is but there should be something between liability only and full coverage (reduced coverage or something?)

But on a brand new car....if you have to get liability only just to 'save a few bucks' you were never able to afford this car...even if you technically could.

Our BMW is a lease and it HAD to have a specific insurance requirement in order to get it registered (well, leasing might be a different thing)

As stated before it depended solely on your financial position. Everyone is different. I have given invoices to customers for over $200K for mistakes they made. They wrote the check and moved on like it was nothing.

Don’t get me started on leasing!

[extrashaky]

What's funny about this thread to me is that some of the people calling other people idiots for not carrying comprehensive insurance are the same people who call other people idiots for buying the extended warranty. They're the same risk calculation.

Originally Posted by computeruser

Given how little insurance costs, it baffles me why someone would go without.

I have four cars. Comprehensive insurance for all of them would cost me $6K here in Florida. That's not cheap.

I carry comprehensive on my BRZ and just liability, bodily injury and uninsured motorist coverage on the others. It runs me about $3K per year, for a 48 year old with a relatively clean driving history who lives in a lower risk area. If I were a kid living near an interstate, I'd pay a lot more.

Originally Posted by Sasquachulator

IMO The car has to be a completely worthless shitbox to switch out from full coverage to liability only. 5k is still a lot of money to just throw away.

It's an estimate of risk, with consideration of likelihood and impact.

To consider the likelihood, let's say I have a $5K car that I expect to keep five years. Just for simplicity we'll ignore depreciation and the time value of money (which would actually decrease the value of the insurance). Suppose there's a 10% chance of having an accident that totals the car during that five years. That means insuring for the replacement of that car should cost 10% of $5K, or $500, or $100 per year.

Can I get comprehensive insurance for $100 per year? Certainly not. Therefore the cost of the comprehensive insurance isn't worth it from a pure risk calculation. I would be better off just putting $5K aside in savings to replace the car and keep the thousands I would have paid for insurance.

But then let's consider the impact. Suppose that $5K car is my only car, and I don't have $5K free to put into a savings account to self-insure. The likelihood of totaling the car is low, but if it does happen I'm screwed and won't be able to get to work. Therefore the impact is high, and it skews the calculation back toward buying comprehensive insurance after all.

I rely on my BRZ for work. If it were totaled now, it's still worth enough and would have enough of an impact that comprehensive coverage is worth the cost. I have enough money in the bank to self-insure that loss, but I'm saving for a house right now and consider the comprehensive insurance protection of not only the car, but also my savings.

My Cherokee, on the other hand, would probably only pay out $2500 if I totaled it with comprehensive insurance. Since I don't rely on it for work, there would be very little impact in losing it, so it's purely a risk calculation. Since I only drive it a couple of thousand miles per year, the risk of totaling it is very low. Very low risk times low market value equals a very, very low value for the insurance.

My Eagle is an interesting case of being in the middle. Right now it's not worth much, and I don't drive it much, so comprehensive isn't worth it. After it's restored, however, an agreed-value policy from a classic car insurer will be worth the money to protect it. It still won't have much impact on me to lose it, but the cost of the insurance will be close enough to the value of the insurance for it to make sense.

Looking to the future, if I were to buy another new daily driver around the time that the BRZ drops below maybe $7K in value, I'd probably drop the comprehensive coverage on the BRZ. The impact would be lessened, and the likelihood would drop to the point that comprehensive coverage wouldn't make sense financially.

I'm not sitting down and doing these calculations in Excel. It's more of a gut instinct calculation based on an understanding of risk.

Originally Posted by Sasquachulator

Im not sure how many 'stages' of insurance there is but there should be something between liability only and full coverage (reduced coverage or something?)

There's uninsured motorist coverage. Comprehensive generally covers you whether it's your fault or not. Uninsured motorist usually covers you if it's someone else's fault and they don't have liability insurance, but not if you're out hooning and wrap your car around a pole.

Also, you can sort of create your own "in between" comprehensive insurance by increasing your deductible. A higher deductible will get you a lower premium, but then you pay more out of your own pocket if something happens. That's one way I got my insurance down from $4000 per year to $3000.

[Dave-ROR]

Originally Posted by Grady

Self insuring in the USA is legal. You have to be able to prove that you have the assets/cash to cover the requirements. It only makes sense in very large companies. When I worked at Raytheon our company van had a legal letter in the glove box stating so. The company I work for now pays around $45k a year for $1M in liability for their vehicles. They do not insure the vehicle.

Once again it is a financial decision for the individual. Everyone’s salary, savings, tolerance for loss is different.

I was replying to the guy who's friend didn't have liability. There are minimum insurance requirements in multiple states, including Florida.

So no, self insuring completely is not legal here. You don't need comp/collision but do need liability. You can't get a plate without the minimum insurance.

[Grady]

Originally Posted by Dave-ROR

I was replying to the guy who's friend didn't have liability. There are minimum insurance requirements in multiple states, including Florida.

So no, self insuring completely is not legal here. You don't need comp/collision but do need liability. You can't get a plate without the minimum insurance.

Here is how you self insure in Texas.

https://www.tdi.texas.gov/wc/si/index.html

Yes you can not just say hey I am self insured. You have to prove you can cover you liability financially and get a certification.

[extrashaky]

Originally Posted by Dave-ROR

I was replying to the guy who's friend didn't have liability. There are minimum insurance requirements in multiple states, including Florida.

So no, self insuring completely is not legal here. You don't need comp/collision but do need liability. You can't get a plate without the minimum insurance.

You can self-insure per Florida Statutes section 324.171. You have to be able to demonstrate that you have $40,000 unencumbered, not using your residence in the calculation. The state then issues you a self-insurance certificate good for one year that is accepted by the DMV in lieu of proof of insurance.

Personally I wouldn't do it. Attorneys typically go after the limits of your policy, since they're reasonably likely to collect from an insurance company. If you don't have an insurer to step in for you, the attorneys would see higher dollar signs.

[extrashaky]

Originally Posted by Grady

Here is how you self insure in Texas.

https://www.tdi.texas.gov/wc/si/index.html

Did you actually read that? It's for worker's comp, not auto liability.

[Dave-ROR]

Originally Posted by extrashaky

You can self-insure per Florida Statutes section 324.171. You have to be able to demonstrate that you have $40,000 unencumbered, not using your residence in the calculation. The state then issues you a self-insurance certificate good for one year that is accepted by the DMV in lieu of proof of insurance.

Personally I wouldn't do it. Attorneys typically go after the limits of your policy, since they're reasonably likely to collect from an insurance company. If you don't have an insurer to step in for you, the attorneys would see higher dollar signs.

Ouch, I'd need a lot of extra cash laying around to self insure my vehicles

Good to know though, wasn't aware that you could in Florida as a private individual.

[Grady]

Originally Posted by extrashaky

Did you actually read that? It's for worker's comp, not auto liability.

Sorry bad link, to many open and selected the wrong one. See post above yours.

[maslin]

Originally Posted by extrashaky

I have four cars. Comprehensive insurance for all of them would cost me $6K here in Florida. That's not cheap.

I carry comprehensive on my BRZ and just liability, bodily injury and uninsured motorist coverage on the others. It runs me about $3K per year, for a 48 year old with a relatively clean driving history who lives in a lower risk area. If I were a kid living near an interstate, I'd pay a lot more.

Ouch. 3 cars and a motorcycle, a 30 and 33 year old with clean histories over the past many years. We pay less than $1200 a year, full coverage on everything.

I only have an extended warranty on my BRZ. $1100 for 7yr/100k coverage. Plenty of ways to make my money back on that one.

[James H]

Very mind stimulating debate we have here. I don’t think one’s financial situation is a factor to be considered in terms of looking at wether self insurance is a smart decision. Legal regulations aside, having the money to cover losses from a bad decision does not make it logical or right.
The point is that if you self insure, every time you drive the car, you are gambling with $20-30K, assuming it’s a fairly new 86, that you wont have any accident. Yes even if the other driver causes it, you could still be liable partly if there is no clear proof and the other drivers argues. For example the other guy changes lanes, sideswipes you and denies it. or if they don’t have insurance you are also SOL.
The odds are the same each and every time as I learned in statistics class. If you pay about $1000 each year for comp, you have to be lucky for 7300 times to break even....
Large companies like Amazon, Apple also buy insurance even if they have more than abundant cash to cover any losses. It is because they are not in business of gambling.

[soundman98]

Originally Posted by James H

Very mind stimulating debate we have here. I don’t think one’s financial situation is a factor to be considered in terms of looking at wether self insurance is a smart decision. Legal regulations aside, having the money to cover losses from a bad decision does not make it logical or right.
The point is that if you self insure, every time you drive the car, you are gambling with $20-30K, assuming it’s a fairly new 86, that you wont have any accident. Yes even if the other driver causes it, you could still be liable partly if there is no clear proof and the other drivers argues. For example the other guy changes lanes, sideswipes you and denies it. or if they don’t have insurance you are also SOL.
The odds are the same each and every time as I learned in statistics class. If you pay about $1000 each year for comp, you have to be lucky for 7300 times to break even....
Large companies like Amazon, Apple also buy insurance even if they have more than abundant cash to cover any losses. It is because they are not in business of gambling.

you're considering only the individuals vehicle loss. insurance generally covers all loss related to the incident, not just the vehicle. in the case of multiple vehicles rear ending each other, the 'person at fault'(because fault falls on the last person to hit--arguably a poor way to default blame, but that's neither here nor there) assumes the liability of the damage to the other persons, as well as the other cars. so if one of the other drivers was driving a new vehicle, and has back issues from the incident, the total cost can quickly exceed 6 figures.

but of course, none of this applies in no-fault states, where each person is responsible for their own injuries and vehicle damage.. where again, even assuming only a $25k vehicle, self-injury in an accident is still a potential to cause 5-6 figures in cost, and the value of self-insuring at that level starts to be difficult to come to terms with contrasted to paying only a 'few' thousand a year to hand off that liability to a company more financially prepared to shoulder those kinds of costs.

[p1l0t]

I see what the insurance executives fly in. They make a killing. I'm sure it saves money in the long run IF you can self insure. Unless you suck at driving...

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[Dave-ROR]

Originally Posted by maslin

Ouch. 3 cars and a motorcycle, a 30 and 33 year old with clean histories over the past many years. We pay less than $1200 a year, full coverage on everything.

I only have an extended warranty on my BRZ. $1100 for 7yr/100k coverage. Plenty of ways to make my money back on that one.

You don't live in Florida like we do.... My truck alone is ~1,100 a year.. add in the BRZ, Cccord and Camaro and I pay ~450 a month. Clean record, full coverage on some, reduced on some, liability only on one, etc.

The two MR2s are on collector insurance though, combined they are ~450 a year or something like that.