Grex Agora46 Conference

Item 225: Theft insurance?

Entered by drew on Mon Sep 15 21:39:13 2003:

Quotes for comprehensive insurance that I'm considering range from the
equivalent of having a car stolen every 33 years, to haveing one stolen
every 20 years. Are these good odds?
11 responses total.
#1 of 11 by slynne on Mon Sep 15 23:38:29 2003:

No. In the long run, it is cheaper to self-insure. Think of it like 
gambling with the insurance company as "the house" The odds are such 
that the house always wins, right. How do you think insurance companies 
make money? Most people get insurance because they know they will not 
be able to afford to replace the car in the short term right after it 
gets stolen so the extra money they pay to the insurance company is 
worth it for their peace of mind.

#2 of 11 by rcurl on Tue Sep 16 00:00:07 2003:

Very rich people with liquid assets far exceeding their property assets
can well afford to self insure, and save the extra costs associated with
insurance. However if that is not the case, usually one has no or poor
means to average losses over time. We buy insurance for that reason. 

One factor is whether or not the incremental cost of comprehensive exceeds
the average losses in that category suffered by the insurance company. I
haven't seen a breakdown of that. An insurance company mighty offer
comprehensive as a "loss leader", making their profit from the major
components of the insurance, liability and collision.

#3 of 11 by gull on Tue Sep 16 00:39:33 2003:

Comprehensive might be reasonable depending on where you drive and park, 
and what your premium and deductable are like.  My dad has had several 
windshields replaced by his insurance company.

I find collision insurance a lot harder to justify, since I tend to own 
older cars.  A good example is my '82 VW Vanagon camper.  Book value for 
an '82 Vanagon with 149,000 miles is $1200, though I could never buy 
another camper in drivable condition for that price.  It wouldn't take 
more than a few years for me to pay out $1200 in extra premiums.

#4 of 11 by rcurl on Tue Sep 16 04:53:59 2003:

We stopped carrying collision insurance on an '86 Subaru. It would not
have been worth repairing for damage more than cosmetic, and certainly not
for cosmetic damage.

However we did carry collision on a 96 Subaru, but with $400 deductible. 
Then that car was totaled, caused by someone else. We got the book value
back - including the deductible, which the insurance company squeezed out
of the culprit.

#5 of 11 by newjp2 on Tue Sep 16 13:12:08 2003:

There's value there.  The insurance company can afford better lawyers.

#6 of 11 by slynne on Tue Sep 16 15:41:56 2003:

I only have liability insurance on my car. It is an older car. If it 
gets stolen or wrecked, I can afford to get another one. It is much 
cheaper for me to self insure. I have home owners insurance though. If 
something were to happen to my house, I would NOT be able to afford to 
replace it. Of course my mortgage lender also requires it.

#7 of 11 by rcurl on Tue Sep 16 16:07:16 2003:

newjp2 makes an important point in #5: often the most important part of
your insurance is the legal defense the insurance company can mount. They
don't want to pay anything just as you don't, if you are not at fault.

#8 of 11 by slynne on Tue Sep 16 20:10:56 2003:

Yes. That is a good reason to have liability insurance.

#9 of 11 by flem on Wed Sep 17 15:07:38 2003:

I have only liability on my car, mainly because I am required to by law, as
I understand it.

#10 of 11 by slynne on Thu Sep 18 00:47:47 2003:

I would probably have liability insurance even if I werent required to 
by law. In fact, I have more liability insurance than is required. 
There is no way I could afford the medical expenses associated with a 
major car accident

#11 of 11 by tod on Thu Sep 18 03:32:42 2003:

This response has been erased.


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