Should I carry full coverage insurance on a car valued at $2,500?
First off, there is no such thing as “full coverage” insurance.There is Liability coverage, which protects other people from your negligence. This is the most important coverage to get.There is Med Pay coverage, which provides a limited amount of money for medical expenses for you and the occupants of your car regardless of liability (or PIP coverage in No-Fault states, which provide medical and wage loss for you and your passengers).There is Uninsured Motorist/Underinsured Motorist coverage that stands in place of the at-fault driver’s insurance if he is uninsured or under insured. This is for you and your passengers and is very important.There is Towing and Road Service coverage.And, finally there is physical damage coverage for your vehicle: Collision and Comprehensive coverage, which carry deductible amounts.If your car is only worth $2500, do not buy Collision, Comprehensive or Tow & Road Service coverages. Join AAA or another motor club for towing and road service. The annual membership is cheaper than the effect on your policy if you were to use that coverage on your auto policy: your premiums would go up.Do buy Liability, MedPay/PIP, UM/UIM coverages.Use the money you saved by not buying the other coverages to increase your limits on Liability, MedPay/PIP, and UM/UIM coverages. Statutory minimum limits are not enough!
What is full coverage car insurance?
Full coverage insurance cover three area of loss. Collision your fault in an auto collision, comprehensive which covers fire theft and vandalism and liability - which covers damage and injury to others including passenger in your vehicle. There are endorsements that cover accesories added, rental car and tow. Also look for Personal Injusry Protection and/or Med Pay for injuries to the policyholder in an accident
Do i need full coverage insurance on a car from a buy here pay here?
Many buy-here, pay-here places do not require as a part of your contract that you carry comprehensive and collision coverages (banks and other lenders generally do). BUT if something happens to the vehicle, they will require that you pay for the car in full, even if it has long since been junked. The insurance protects you from having to pay off a car you no longer have.
Car insurance coverage question?
A. Comprehensive means, stuff that happens to your car, that is NOT you driving into something, or something driving into you, and is also NOT flipping the car. Examples are fire, theft, vandalism, broken glass, and in some states, collision with an animal. If you have a loan on your car, the bank will require you to carry it. I carry it, because it's very easy to get a cracked windshield, which can cost a lot to replace. B. Collision is when you run into something with your car, or another car (or shopping cart, or bike) runs into your car, or you flip your car. C. Uninsured coverage is when you are hit by someone else who does not have insurance, and you have bodily injury - it pays medical bills, and pain and suffering. It also covers you as a pedestrian, and covers you for hit-and-run injuries. D. Underinsured - this is when you're hit by somebody who has some insurance (usually state minimum limits), but you have A LOT of injuries. This pays the difference between how much coverage he has, and how much you bought. Example: You have $100,000 UIM. He has $20,000 bodily injury. He hits you, you have two broken legs, are in traction in the hospital for 6 weeks and need a month of rehab afterwards. Your hospital bills are $120,000. His policy pays $20,000, and your policy pays $80,000. Your agent should be explaining these things. If they can't/won't, you need a new agent. By the way, there is no "acts of God" in the insurance world. It's not written into any policy. It's not a proper insurance term. Also, flood damage to your car IS covered under comprehensive. NO CAR DAMAGE IS EVER COVERED BY A HOMEOWNERS POLICY, contrary to what someone above posted.
Why do I need gap insurance on my car when I have full coverage?
It doesn't matter WHO pays the bill you or the other driver's insurance unless you litigate the accident all the prices are based on Kelly Blue Book values not what you think you should be paidIf you bought the car at $30K the SECOND you titled it the value dropped by minimum 10% and more likely 13 or 14%. The gap pays you to buy out the loanThat is why it is suggested to NEVER put down more money on a car loan then the minimal amountIn an accident you will never get your money back.The Gap ONLY pays the lender not youIf you had say put down $10K on the deal above and total it the day you bought it your insurance or the other driver will pay the VALUE of the car about $26,500Your loan is for $20K and so you come out with a check in your pocket for 6,500 and INSTANT loss of real funds of $3500 with NO way to recover it.NO gap coverage since there is no gap as you put down too much money.A car is a TERRIBLE asset to put any cash into for this exact reason. Unless you get into the exotic or antique where you and the insurance company agree in advance what the car is going to paid at in the event of total loss a daily use car is a financial loserYou MUST be upside down in order to qualify for gap coverage so make sure you are before paying the increased premium for the coverage. So many people put down large deposits and then buy gap where is NO chance of ever using it. Literally NONE since the car will never be upside down during the life of the loan. Dr D
Will full coverage car insurance cover a blown head gasket?
Your confusing insurance with warranty, warranty covers mechanical failure insurance covers accidents, so if you can somehow convince your insurance company your blown head gasket is due to an accident then it will be covered, but somehow I don't see that happening
Do wealthy people carry full coverage insurance on the cars they drive?
You better believe it and more.When buying auto insurance you have probably been asked by the insurance agent if you own a home. If you do high liability coverage will usually be recommended because you have a lot to lose. Say you have minimum coverage (usually about $30k) are at fault in an injury accident that results in $250k of medical bills. After the $30k the insurance pays you are personally on the hook for the balance. If you are like most people that could drive you to bankruptcy. So if you are smart you buy much higher liability limits than the minimum.Personally I think that there is another reason to buy the highest coverage that I can afford. If I cause another person serious injury I have a moral as well as legal obligation to provide compensation and without adequate insurance I cannot.Now just put a wealthy person in that situation. There may be millions of dollars at stake. Even tens of millions. Imagine being responsible for an accident resulting in permanent disability. It happens and the costs can be many millions over the life of the victim. Usually wealthy people (and some not to wealthy people) carry umbrella coverage which covers excess liability when their auto, homeowner’s, boat insurance and so on is exhausted.When someone gets up to the hundreds of millions of dollars they may chose to self insure meaning they pay claims out of their own assets. Not many do though.
What happens if I switch from full coverage insurance to liability on a older car that I'm still paying for? I live in Texas if that matters.
If your lender catches you they will purchase wildly overpriced single interest insurance. This will raise your payoff by thousands of dollars and only protect them in the event something happens to your car.If you are financed via owner financing they will repossess your car and require you to pay it off in full to get it back.Or, nothing. It depends on how on top of their game they are. When you signed a contract you agreed to provide full coverage while you owed money. You're not breaking any laws but you are in breech of contract. If they catch you they will ruin your afternoon for sure.