Automobile Insurance - Automotive Repairs - DIY Chatroom Home Improvement Forum


Go Back   DIY Chatroom Home Improvement Forum > Do It Yourself > Automotive Repairs

CLICK HERE AND JOIN OUR COMMUNITY TODAY...IT'S FREE!

Reply
 
Thread Tools Display Modes
Old 07-26-2011, 02:28 PM   #1
Member
 
Join Date: Jan 2010
Location: Alabama
Posts: 352
Rewards Points: 250
Question

Automobile Insurance


Over the years, I have noticed when you purchase collision automobile insurance, the value of the vehicle continues to decline, along with coverage, but the premium stays the same
I have carried State Farm Ins. for about 40 years and I wonder if all companies are the same concerning this matter

Advertisement

Giles is offline   Reply With Quote
Old 07-26-2011, 03:08 PM   #2
Jack of all - master none
 
hyunelan2's Avatar
 
Join Date: Aug 2007
Location: SW Suburbs of Chicago
Posts: 1,222
Rewards Points: 530
Default

Automobile Insurance


Though the dollar value from reselling your vehicle may decline, the cost of repairing it will not become significantly less just because it is now 3 years old. That is what they are insuring, for the most part. Replacement costs and payouts for total loss gets things a little tricky, but for the most part a collision is a repair bill for the insurance company. What it costs to install a new hood, fender, and repaint today is about the same as it will be 5 years from now.

Advertisement

hyunelan2 is offline   Reply With Quote
Old 07-26-2011, 03:54 PM   #3
DIY staff

 
Join Date: Sep 2009
Location: Kane county,Illinois
Posts: 22,319
Rewards Points: 3,276
Default

Automobile Insurance


Dog Gone!!!! That explanation is absolutely logical! ----
__________________
New members: Adding your location to your profile helps in many ways.--M--
oh'mike is offline   Reply With Quote
Old 07-26-2011, 06:16 PM   #4
Member
 
Join Date: Jan 2010
Location: Alabama
Posts: 352
Rewards Points: 250
Default

Automobile Insurance


Quote:
Originally Posted by oh'mike View Post
Dog Gone!!!! That explanation is absolutely logical! ----
I can understand repair costs but what if you were to have a total loss with the vehicle when it is 5 or 6 or even 10 years old? It is certinally going to be a fraction of what it would have been 1 year or less!
Giles is offline   Reply With Quote
Old 07-26-2011, 09:50 PM   #5
Pro Flooring Installer
 
rusty baker's Avatar
 
Join Date: Feb 2009
Location: SW Missouri
Posts: 4,024
Rewards Points: 2,318
Default

Automobile Insurance


On old vehicles, the deductible can become more than what the vehicle is worth. Then it's time to go to liability only.
__________________
The ads in my post are there without my permission. I do not endorse any of the products.
Semi-Retired Installer
Installing since 1973
rusty baker is offline   Reply With Quote
The Following User Says Thank You to rusty baker For This Useful Post:
oh'mike (07-27-2011)
Old 07-27-2011, 10:16 AM   #6
Jack of all - master none
 
hyunelan2's Avatar
 
Join Date: Aug 2007
Location: SW Suburbs of Chicago
Posts: 1,222
Rewards Points: 530
Default

Automobile Insurance


Quote:
Originally Posted by Giles View Post
I can understand repair costs but what if you were to have a total loss with the vehicle when it is 5 or 6 or even 10 years old? It is certinally going to be a fraction of what it would have been 1 year or less!
Most insurance companies have a formula they use to calculate damage cost to % of vehicle value to decide if it is a total loss. Let's say, for example, repair cost > 50% of the vehicle value = total loss.

As your car gets older, and the fair market value declines, the likelihood that an accident will cost more than the % of vehicle value they indicate, goes up. So, there is an increased likelihood they are going to total your 7 year old vehicle, even if it has the exact same damage as your brand-new vehicle. They need to insure against that risk of payout.
hyunelan2 is offline   Reply With Quote
Old 07-27-2011, 01:46 PM   #7
A Little Of Everything
 
Join Date: Nov 2010
Location: Omaha, NE
Posts: 2,209
Rewards Points: 1,098
Default

Automobile Insurance


Quote:
Originally Posted by Giles View Post
Over the years, I have noticed when you purchase collision automobile insurance, the value of the vehicle continues to decline, along with coverage, but the premium stays the same
I have carried State Farm Ins. for about 40 years and I wonder if all companies are the same concerning this matter
I dropped all my State Farm policies last year - auto & home policies. Simply stated, they kept jacking my premiums. I think one of the homeowners' premiums went up almost 40% in 2 years.

Bottom line: There is no insurance company that is in business for YOUR benefit. They're in it to make money, and they will do so in any way they can.
DrHicks is offline   Reply With Quote
Old 07-27-2011, 01:48 PM   #8
A Little Of Everything
 
Join Date: Nov 2010
Location: Omaha, NE
Posts: 2,209
Rewards Points: 1,098
Default

Automobile Insurance


Quote:
Originally Posted by hyunelan2 View Post
Though the dollar value from reselling your vehicle may decline, the cost of repairing it will not become significantly less just because it is now 3 years old. That is what they are insuring, for the most part. Replacement costs and payouts for total loss gets things a little tricky, but for the most part a collision is a repair bill for the insurance company. What it costs to install a new hood, fender, and repaint today is about the same as it will be 5 years from now.
Actually, though what you're saying is true about repair costs, no insurance company is going to pay $5,000 to repair a $1,000 vehicle. They'll just total it out, pay you the book value minus deductible, and take the car.

It can be a REAL screw job!
DrHicks is offline   Reply With Quote
Old 07-31-2011, 03:43 AM   #9
Jack of All Trades
 
Join Date: Jun 2011
Location: Boston
Posts: 95
Rewards Points: 75
Default

Automobile Insurance


Quote:
Originally Posted by DrHicks View Post
I dropped all my State Farm policies last year - auto & home policies. Simply stated, they kept jacking my premiums. I think one of the homeowners' premiums went up almost 40% in 2 years.

Bottom line: There is no insurance company that is in business for YOUR benefit. They're in it to make money, and they will do so in any way they can.
Yeah, SF raised my home owner's insurance by 18% for no apparent reason just a month ago. If you call and ask they just say "it's a rate increase" if you ask why it increased they said "well, it's just a rate increase" so in other words, they have no reason other than wanting to ream more $$ out of my ass.

Last edited by DoctorWho; 07-31-2011 at 03:46 AM.
DoctorWho is offline   Reply With Quote
Old 07-31-2011, 11:29 AM   #10
Pro Flooring Installer
 
rusty baker's Avatar
 
Join Date: Feb 2009
Location: SW Missouri
Posts: 4,024
Rewards Points: 2,318
Default

Automobile Insurance


My in-laws had S.F. on their home for 30 years. They had one claim and got cancelled.
__________________
The ads in my post are there without my permission. I do not endorse any of the products.
Semi-Retired Installer
Installing since 1973
rusty baker is offline   Reply With Quote
Old 08-01-2011, 12:20 PM   #11
Member
 
Join Date: Jul 2009
Location: SW Ohio
Posts: 407
Rewards Points: 258
Default

Automobile Insurance


I've had Erie Insurance for my home and car for many many moon. A tad bit more than some other insurers, but definitely worth it. One time I totaled a car and they wrote me a check for hundreds more than the car was worth. I've never had problems fighting them for coverage or with them jacking up my premiums.
spaceman spif is offline   Reply With Quote
Old 08-01-2011, 03:39 PM   #12
Member
 
Join Date: Sep 2007
Location: NY lower Hudson Valley
Posts: 217
Rewards Points: 164
Default

Automobile Insurance


I have been with USAA for many years and I think they are great. Most articles rating ins co's put them at or near the top. They used to insure only active duty and retired military officers but I believe they have now extended coverage to current and former enlisted too. If you have a DD-214, check them out.
zircon is offline   Reply With Quote
Old 08-02-2011, 10:17 AM   #13
Member
 
Join Date: Jul 2011
Location: Windsor, CT
Posts: 144
Rewards Points: 75
Default

Automobile Insurance


Quote:
Originally Posted by Giles View Post
Over the years, I have noticed when you purchase collision automobile insurance, the value of the vehicle continues to decline, along with coverage, but the premium stays the same
I have carried State Farm Ins. for about 40 years and I wonder if all companies are the same concerning this matter
You also have to remember that the cost to insure a vehicle has very little to do with the cost of the vehicle. The vast majority of insurance premiums these days is to cover the liability risk, or the risk of you injuring someone else or damaging their property. You could be driving a rusted out 1985 pickup and still hurt or kill the other driver. The claims are not nearly as common as collision claims, but given the amount that has to be paid if something does happen, it accounts for about 70-80 percent of your insurance premium usually. Our lawsuit happy nation has not helped this.

The insurance company generally earns about 5% profit on the premium, before operational costs. If you pay 1000 per year, about 950 dollars is going towards claims in your area, and the rest goes towards operational costs. They are able to make a lot of money on short term investments with their "reserves", or the amount they have to keep in the bank by law to be available for claims. Thats why so many insurers got hit so bad in this last recession, becuase they had so much money invested.

Also, a lot of companies give you a discount for carrying comprehensive (damage from fire,theft,animals, etc) on a vehicle, which means that your premium is less for liability+comp vs just liability. The theory their is if your willing to pay for some kind of physical damage coverage on the vehicle, your "pride of ownership" in the vehicle will cause you to drive more responsibly.

USAA is hands down the best company in my opinion, but you have to have some military affiliation to get in the door. Some other great "open" companies in addition to Erie would be Amica, if you are in Jersey the NJ Manufacturers, and The Hartford. I personally deal with The Hartford, and love them, they are there when you need them, and pay fairly for claims.
teamcampreder is offline   Reply With Quote
Old 08-02-2011, 11:24 AM   #14
Member
 
Join Date: Jan 2010
Location: Alabama
Posts: 352
Rewards Points: 250
Default

Automobile Insurance


You also have to remember that the cost to insure a vehicle has very little to do with the cost of the vehicle
What I am considering is that, say---you purchase a new vehicle valed at $30K. It is totaled within a few months and is replaced by your insurance company.
Now, say---you drive the new vehicle for seven years and it is totaled--what do you receive from your insurance company? A fraction of its original value but you are still paying a premium as though it were new!

I would have to disagree with your above quoted text----It certinally cost me more to insure a $75K BMW then then it did to insure a $13K Toyota!!
Giles is offline   Reply With Quote
Old 08-02-2011, 11:27 AM   #15
Member
 
Join Date: Jul 2011
Location: Windsor, CT
Posts: 144
Rewards Points: 75
Default

Automobile Insurance


Quote:
Originally Posted by Giles View Post
You also have to remember that the cost to insure a vehicle has very little to do with the cost of the vehicle
What I am considering is that, say---you purchase a new vehicle valed at $30K. It is totaled within a few months and is replaced by your insurance company.
Now, say---you drive the new vehicle for seven years and it is totaled--what do you receive from your insurance company? A fraction of its original value but you are still paying a premium as though it were new!

I would have to disagree with your above quoted text----It certinally cost me more to insure a $75K BMW then then it did to insure a $13K Toyota!!
Take a look at your insurance policy and see how much the collision is costing individually. You will see what I mean.

I am also willing to bet it didn't cost you 6 times as much to insure the bmw than the toyota, if all the other risk factors were the same. (13x6=78)

Advertisement


Last edited by teamcampreder; 08-02-2011 at 11:31 AM.
teamcampreder is offline   Reply With Quote
Reply


Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
house insurance company wants to inspect my house! Knucklez General DIY Discussions 63 07-16-2013 09:05 PM
Fraudulent Insurance Issues Roofmaster417 Roofing/Siding 4 07-13-2011 09:29 AM
What kind of roof is this? cwelte Roofing/Siding 16 02-23-2008 02:17 AM
How do I get insurance? ETD66SS Building & Construction 2 06-19-2007 04:16 PM
NYC, Insurance claim, Lawyer? Contractor? Insurance company?who first(house trouble) Woodpecker Building & Construction 6 04-09-2007 07:59 PM




Top of Page | View New Posts