But with cars it's different as the individuals are responsible for their action. Not some shipping company. Why should I pay for reckless/drunk drivers?
> But with cars it's different as the individuals are responsible for their action. Not some shipping company. Why should I pay for reckless/drunk drivers?
As with all real insurance plans, you are insured against the actions of others as much as you are against your own actions. This is obviously true in the 12 states + Puerto Rico with no-fault policies.
You may well be distracted at some point and crash into someone else, which is why both of you have insurance. It's crazy to think you can't possibly ever make a single mistake - ever. You can and you will, which is why you're legally required to carry insurance.
Car insurance plans often cover a lot more than just the driver’s own actions and mistakes. Common line items are insurance for personal injury and property damage caused by other uninsured drivers (because good luck getting your medical bills paid by garnishing the other person’s wages), and damage from weather, natural disasters, falling objects, animals, and vandalism.
When I ran my quotes, about 3/4 of the premium was for liability. The rest (fire; theft, fixing my car if it was my own fault, hail, etc) made up the balance.
My car is worth $4k tops, so I cancelled the rest. The odds of a total loss are low, so a $500 or $1k deductible combined with the likely scenario of a $2k-$3k repair bill made it very meh to bother paying another $400/yr for.
> The odds of a total loss are low, so a $500 or $1k deductible combined with the likely scenario of a $2k-$3k repair bill made it very meh
It's even worse than that. If you have significant damage, there's a good chance they'll "total" your car. This means they'll write you a check for the appraised value (minus your deductible), and scrap the car. And it's awfully hard to find a worthwhile replacement for the book value of your old one, so even with insurance you're not avoiding the bill.
Another thing that irks me about insurance is that when you raise your coverage limits the premiums go up significantly. I can't imagine the long tail of extreme damages form a significant part of their actuarial tables, so it feels more like price discrimination based on your own assets that you don't want to lose. But really the entire point of insurance is to protect against the vanishingly small long tail - the idea of liability coverage limits should be done away with (if someone causes a million dollars in damage and can't pay, their insurance company shouldn't be able to walk away!), and the main cost-saving lever should be your deductible.
Yeah, a “total loss” to me is a fire where the car is worth $100 to a scrapper. To insurance, if every fender and bumper gets dented, it’s a total loss, but I’m happy to continue driving it, and it still has $2k+ in parts.
A family member made money on a not-at-fault accident where they would pay $2700 to a repair place, but they took a cheque for $1900 and got it fixed for $950 (parts and labour).
That person that runs you over may legally only have $25k in insurance to cover your death. Your estate will have to go after their non-estate of debts>assets to get any more.
But in mine, it’s much better to have have insurance than not, and the minimum coverage is $200k at least.
As with all real insurance plans, you are insured against the actions of others as much as you are against your own actions. This is obviously true in the 12 states + Puerto Rico with no-fault policies.
You may well be distracted at some point and crash into someone else, which is why both of you have insurance. It's crazy to think you can't possibly ever make a single mistake - ever. You can and you will, which is why you're legally required to carry insurance.