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$1,021 Savings on insurance

ok, I'm all alone on this one. With risk comes reward, history shows me the risk is low and the numbers show the reward is not only high, but pays

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Old 09-23-2011, 05:13 PM   #16 (permalink)
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ok, I'm all alone on this one.

With risk comes reward, history shows me the risk is low and the numbers show the reward is not only high, but pays back annually.

Personal accountability and financial responsibility are out of style, but if I save the money that I'm not giving to the ins co for about 15 months, it will offset the deductable 100% then and I put 1k in my pocket annually. (After I reserrect this thread to say "I told you so" )
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Old 09-23-2011, 05:16 PM   #17 (permalink)
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I work in a bodyshop. I see many customers mulltiple times a year. Yes your monthly payment is alot less, but that's still quite a risk. You may have it in the shop 2-3 times in one year. Now your out $6,000. Last year I had one guy hit 4 deer, and 2 snow banks in 7 months. I can't tell you how many people I see with high deductables who either have to card it, or just can't afford it. Be aware that things happen, and they can happen often. High deductables I think only apply to those who own shops, can do the work themselves, or can obtain deals from contacts. Also I have many people come in well into there 40's and 50's say this was thier first accident. I also see some of them more than once. To each thier own. Just a friendly warning. This can easily bite you in the end. I'd shop around for another carrier. Always remember S**t runs down hill.
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Old 09-23-2011, 06:28 PM   #18 (permalink)
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Here are my observations.

1. Auto insurance companies typically target loss ratios of 60% to 70%. That means that for every dollar you spend on auto insurance only 60 to 70 cents are paying for expected losses. Thus, you are better off with higher deductibles. As the difference in price is not just your expected losses, but your expected losses plus company expenses and profit.

For home insurance, the loss ratios are even lower, 40% to 50%.

I apologize if I sound like a jerk-face. But if you can't afford to hold a few grand in cash you probably can't really afford a 30 to 40 thousand dollar sports car. And to satisfy my lender, I kept more than my deductible in an account with them. That way they knew I could pay my deductibles. Your lender should understand the idea of collateral.

2. Take your savings in deductibles and get higher BI limits. You should have nothing less than 100/300 or preferably 500/500. If you have left over cash, get a personal umbrella policy or excess liability policy. Even if you don't have the assets to pay for a large liability claim the courts can still garnish your future wages. Get high limits!

3. Massachusetts is the worst auto insurance market the in country. The state pretty much tells companies what to charge. As a result, you can't get insurance from most of the big companies (Allstate, State Farm, etc.). You can only purchase from small companies that operate only in Massachusetts because it is such a niche market. Savings like that aren't going to be seen in many other locations.

California, is not much better. Write your local government representatives and demand that they reduce rate regulation. It will increase competition and drive down prices!

4. Shop around! Insurance rates are like a piece of paper floating in space. Your rate can vary by where you land on the paper, the shape of the paper, and the height of the paper. Each company has a different paper and the papers vary by state. Heck, the paper even varies within state and company as some companies may close a book of business and only renew the current insureds. Then they make a new paper for new business. The most profitable customers for an insurance company are the ones that just stay with them the longest.

5. The 370Z is pure sex! It is hot, loud, and rough!
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Old 09-23-2011, 06:43 PM   #19 (permalink)
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Originally Posted by Baconboy View Post
ok, I'm all alone on this one.

With risk comes reward, history shows me the risk is low and the numbers show the reward is not only high, but pays back annually.

Personal accountability and financial responsibility are out of style, but if I save the money that I'm not giving to the ins co for about 15 months, it will offset the deductable 100% then and I put 1k in my pocket annually. (After I reserrect this thread to say "I told you so" )
I'm with you. I have 5 vehicles I insure in MA right now, I think I'm going to try this, it will probably pay for itself in the first year.
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Old 09-23-2011, 06:49 PM   #20 (permalink)
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3. Massachusetts is the worst auto insurance market the in country. The state pretty much tells companies what to charge. As a result, you can't get insurance from most of the big companies (Allstate, State Farm, etc.). You can only purchase from small companies that operate only in Massachusetts because it is such a niche market. Savings like that aren't going to be seen in many other locations.
This has changed a little bit over the last 2 years. Insurance companies now have the option to change their "rate" once a year at the beginning of each year by submitting a adjustment to the state review board. Previously the insurance companies made a request to change the rate (always up of course) and then the state would set the global rate that all companies would use. At least there is some competition now. Insurance companies are also now a little more free to offer additional discounts for things like driver training, student honor role etc. Most insurance in the state is still operated by "agents" but they are just the middleman for the insurance company.
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Old 09-23-2011, 08:41 PM   #21 (permalink)
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Quote:
Originally Posted by Baconboy View Post
ok, I'm all alone on this one.
Apparently I'm not very smart. Why do so many people think this high deductible is such a bad idea?

I assume most people dont have accidents every 1.4 years (or whatever your math was) and wouldnt in theory their rates increased based on the amount the insurance payed out?

I guess if this is your daily driver, the risk is higher...

edit: I just ran a higher deductible for my policy from $1k to $2.5k deduct on coll and comp, and I will save a whoooooping $68/year.... Doh. Not as lucky as you Baconboy

Last edited by poorazn; 09-23-2011 at 08:57 PM. Reason: quote from insurance
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Old 09-23-2011, 10:23 PM   #22 (permalink)
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You better have that $2k ready. You can have all the confidence in the world. There are some types of accidents you just can't avoid. And the Z has enormous blind spots so there's an increased chance of inevitability with accidents. Safe and extremely excellent drivers have accidents too. I had my first one after 21 years of driving, no accidents 2 speeding tickets and 1 parking ticket. When I had my first accident I was going under 10mph. The truck that hit me was doing about 60mph in a 35mph zone and barreled from a steep hill where she couldn't see above and I couldn't see below. And she was texting. So she never even tried to break. When I stopped I was on the yellow. I hadn't intruded in her lane yet. And if I did? It could've not been more than 2 or 3 inches in. Enough to have avoided the accident if she wasn't speeding and texting. I guess she figured since the block is usually dead its ok to speed there. Well she was wrong. Texting was the icing on that cake.
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Old 09-23-2011, 10:38 PM   #23 (permalink)
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^^ deductible only matters if it is your fault. If it is the other guy's fault, then their insurance pays and their insurance pays the whole amount not the amount - your deductible.

In any case, you can't argue with math. As another poster calculated, he only has to go 1.4 years without a claim against his insurance company.

Look at it this way. If you pay $1000 more a year to have a $500 vs $2k deductible, then you are betting $1000 every year that between now and when your next premium is due that you will have an at fault accident and hence you will save $500.

Would you bet $1000 to win your stake back + $500 on the flip of a coin? The chances are way less than even that you'll make a claim.

Low deductibles are only a good idea if you can't afford to cover the cost of a high deductible. If you can afford to lose 2k, then you will more than make up for it in the long run by having high deductible/lower cost insurance.
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Old 09-23-2011, 10:46 PM   #24 (permalink)
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so does everyone here run a $0 or $100 deductible? I'm guessing not, so at some point a tradeoff was made. Sounds like $1021 a year is worth the $1500 increase in deductible. Sure if you dont have an extra $1500 and drive a Z, you've got other problems.

So I ran my numbers again. If I go to a $50 deductible from $1000 I pay $636 more a year. Would you guys recommend I switch to a $50 deductible?
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Old 09-23-2011, 10:52 PM   #25 (permalink)
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^^^ I'm definitely on your and the OP's side of the risk/payoff tradeoff

I wish I could have the savings the OP stated by going to a 2K deductible. I'd do it in a flash. Mine is at 1k and I think I save around $400 a year over a $500 deductible.
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Old 09-24-2011, 03:23 PM   #26 (permalink)
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I saw a lot of insurance price discussions here. I'm paying $680 for full coverage, here's how.

Today I was quoted $1,701 with a $500 deductable. I was able to reduce the price to $680 by maxing the deductable to $2,000. ($1,021 savings annually)

I had no idea the deductable could have that kind of impact, so I wanted to share.

My last claim was in 1998, and I'm a cautious driver (and a careful parker) so I'm willing to bet on myself. If you are in the same category, you could consider this too.

This is through Met Life. I use Grundy for my other special cars. A Chevelle and a 1934 Ford cost about $600 combined, small deductable. The catch is that they limit usage. You can joy-ride all you want but you can't commute or run errends. The Z is my driver, so I don't qualify with Grundy.
Even though I live in Western MA, my insurance company is based in Lowell. I pay a super cheap rate with only $500 deductible. My agent is also really really nice and always helps me out over the phone and mails me forms already filled out, etc. etc. PM me if you want the name.
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Old 09-24-2011, 09:34 PM   #27 (permalink)
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I don't know what companies some of you guys have, but I'm guesing some of them are those $hitty ones. I'm guessing the ones that takes for ever to get your claim thru them if you get hit by one of their clients.

Been there trying to get my old lady car fix with those insurance companies. Low premium, high deductible = company doesn't have the money to pay a claim on time. Have to go thru hell and high water!
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Old 09-24-2011, 09:39 PM   #28 (permalink)
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what insurance companies do you recommend checking out?
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Old 09-24-2011, 09:46 PM   #29 (permalink)
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what insurance companies do you recommend checking out?
The ones that are established companies for years like USAA, GIECO, All State, State Farm, etc.

Cheap is not always better.
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Old 09-24-2011, 10:47 PM   #30 (permalink)
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Agreed that cheap is not always better. Personally, I know I'm paying a little more for insurance for higher coverage, but like others have mentioned before, it depends on your assets. I have an umbrella policy that also is tied to my homeowner's insurance. I would hate to lose my house because of a car accident.
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