116
Why not only have the drivers insure their car and then let everyone purchase separate
insurance for injuries?
Because people are irresponsible, cheap and bankrupt. And cars are dangerous 1.5 ton weapons.
If you lose control of your car and hit a group of people then you as the driver are liable. You also are totally unable to meet that liability and ...
101
I think the key to this question is your last sentence, because it's applicable to everyone, high net-worth or not:
How would one determine whether they are better off without insurance?
In general, insurance is a net good when the coverage would prevent a 'catastrophic' event. If a catastrophic event doesn't happen, oh well, you wasted money on ...
101
Negotiation 101, never be the first to say a number.
You tell them you have a $300,000 limit and magically they want $300,000. Alternatively, they may just assume you carry the minimum.
71
Having worked in insurance, I can give you a few pointers.
Firstly, state that you "may have to complain". Insurers hate complaints because they really complicate matters, are loads of work and must be tracked. I would advise not actually escalating it to a complaint until later as this may cause a delay as the actual process is quite convoluted. Mentioning ...
70
There are several aspects to this but at a high level it boils down to
To some extent the insurer has fixed costs.
Underwriters apparently think there is a marginal decrease in risk for each marginal mile driven.
In the case of comprehensive coverage the car is being covered whether or not it's being driven, insurers are about to get pummeled with flood ...
61
I think I understand where JonathanReez is coming from owing to the fact that the Canadian province of British Columbia, along with Saskatchewan, Manitoba, and Quebec have nationalized car insurance.
So one can make a comparison to single-payer healthcare. Everybody pays the government for health insurance. If you slip on a rug at home the government pays ...
57
It isn't just GEICO that tells you this, every US car insurance company instructs their customers to not mention the amount of coverage.
Your job is not to negotiate. Your job is to collect the specified information and to hand the claim process over to the insurance company. That is also why they tell you not to admit fault.
When you start discussing the ...
54
I assume this happens to everyone in the US, and I believe the reason is simply due to competition. Here are my data points:
I was with Allstate for 17 years, and the rates were pretty consistent for a long time, then about 6 years ago every 6 months my rate would go up slightly. After 2-3 years of that I called and I asked why? I was told it was due to the ...
52
Yes, and the math that tells you when is called the Kelly Criterion.
The Kelly Criterion is on its face about how much you should bet on a positive-sum game.
Imagine you have a game where you flip a coin, and if heads you are given 3 times your bet, and if tails you lose your bet. Naively you'd think "great, I should play, and bet every dollar I have!" -- ...
46
There are 2 maxims that help make sense of insurance:
never insure anything you can afford to replace
always insure anything you can't afford to lose
Following those 2 rules, "normal" insurance makes sense. Can't afford to replace your car? insure it. Can afford to lose your TV? Don't insure it.
People with a net worth in the low millions have very ...
37
You should start by making a written complaint to the insurance company itself. You have two angles of attack:
What was discussed when she was sold the policy. Make sure you set out exactly what you believe you were told and highlight that they didn't ask about commuting (assuming that's the case). Ask them to preserve any recordings they have of the call ...
36
If the loan is unsecured, then you own the car.
If the loan was secured on the car, and you lost, sold or destroyed the car, you would have to repay the loan. Since it's not, you get to keep the debt until you pay it off, regardless of whether you still have the car or not.
28
First you should understand the basics of how insurance companies make money:
In a simple scenario, assume 1,000 have car insurance. Assume that on average, 100 people have accidents per year, and that each accident costs $10,000. So, we can expect total costs to be $1,000,000 per year. Some of those costs will be paid by the drivers, who have some sort of '...
27
In general leasing requires you to have an insurance policy that meets certain criteria (such as the policy being comprehensive).
However, in the event that the vehicle is written off the insurance company will give you (their belief of) the value of the vehicle at the time, less any excess, whereas the leasing company will expect you to give them (their ...
25
Not all miles carry the same amount of risk. A survey by Progressive indicated that accidents are most likely to occur within 5 miles of home, and 77% of accidents occur within 15 miles of home. Only 1% of accidents occurred 50 or more miles from home. That's from 2002, but it seems unlikely to have changed much. Since the miles closest to your home carry ...
24
Most of this content is gleaned from Geico's website:
There is no need to notify the insurance company about this situation, however there are some rules and liabilities to be aware of before you lend the car to someone. In case of an accident, your insurance will be used meaning YOUR deductible and, if damages exceed your coverage, you could be liable for ...
24
The point of insurance is to trade high variable costs for much lower fixed costs. The question isn't whether you can afford what would be a catastrophic event for anyone else, but whether it would be better to pay a small amount regularly vs. a possibly larger amount occasionally.
One of the reasons to buy insurance is to avoid costly litigation (rich ...
21
This is going to be a philosophical answer, but here it goes.
What is the purpose of an insurance? In my perspective, insurance is a way to protect yourself from risks in life you can not afford to take.
Following this principle, most of the people do not have enough money to fix a Ferrari, or pay the medical expenses of a third party--so insurance ...
21
Source: I worked as an IT consultant for a major US multi-line insurance company, working on policy rating - Property and Casualty.
A few notes:
You can't simply remove your wife if she ever drives; she needs to be insured. She may need to be insured if she doesn't drive, but has a driver's license. She will be if she's a named owner of any of the vehicles ...
20
You must pay every dollar of the value of the car as agreed to on the lease. Period.
Some people carry insurance. This insurance will pay out based on the insurance policy. The usual default is that the insurance will buy you a non-smashed used car of comparable make, model, age and trim options. Minus any deductibles.
Note that these are two ...
16
OP, on closer examination, you seem to be saying:
If you want insurance, buy it out of pocket. Makes sense to me as opposed to only targeting motorists.
You are simply calling for eliminating the idea of liability.
Example, I have a factory, it explodes, and your nearby house is damaged.
The J.R. solution is "why target factory owners for the cost?"
...
15
My insurer will let me suspend my insurance and park the car. It costs about $1/month, but I am still covered if it gets stolen from where it sits.
I guess I can call and change it from suspended to not suspended once a month in their system, but I really only do it a couple of times a year for a second car.
Call your carrier and see if they have such a ...
14
The limits of your coverage are completely irrelevant to anything you might do in a situation where your liability coverage is in play. More directly, there is nothing at all for you to gain from providing this information. Another way to look at the question is "why would you want to reveal this information?".
There probably isn't much downside to it for ...
13
If you go a period of time without car insurance, when you want to get it again you are treated as a higher risk insuree. I had that happen too me when I went back to school. I got rid of the car while in school and after finally graduating, getting a job and a new car my insurance rates were quite high despite having a safe driving record. They said it was ...
13
Insurance payments cover your loss of value in what you have protected. If you have a car in perfect condition that gets hail damage, it has lost value, so you are entitled to a payout (assuming you have that coverage). A car with existing hail damage that gets hail damage has lost no value, because the condition of the car hasn't changed. This would apply ...
13
Part of auto insurance is your potential liability cost. I'm personally in the same boat as you, no infractions, same car, and my insurance went up (though less than yours). I live in California, in an area where I'm likely to hit a Mercedes (or some other luxury thing) if I hit anything. Lots of people in my area buy expensive cars and as a result I pay ...
12
It depends. "High net worth individuals" is very subjective.
Lets say a person is worth 1.5 million. High, but not super high. For one, they should have an umbrella policy. Until your net worth is above 300K, you really don't need an umbrella policy. They should insure their home and cars, but should probably have high deductibles. Health insurance ...
12
You own the car.
The insurance company wants to know: leased, financed, or owned; so they know if they have to inform the "lender" that you have insurance, and let the lender know the amount of insurance. The lender wants to know that their collateral is being protected. The insurance company may need to contact the lender if you make a claim so that the ...
11
You better consult with a professional insurance agent (face to face, AllState have local agents everywhere), and make sure they show you exactly in the policy where it confirms whatever that is that they're saying.
To the best of my knowledge, living together is not only not enough for her to be covered under your insurance, it is most certainly the ...
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