Comprehensive Insurance vs Third Party - Ideas/thoughts

[Ridin-High]

Evening all,

Early next yr my insurance renewal coming up for my car. Been considering changing from full comp to third party. Below is the numbers/info, could i get some feedback/thoughts.

- Only really drive to commute to work every second day and parked in secure car park.
- Parked outside at home in low crime suburb
- I would consider myself a safe driver, never road rage when people cut me off, relaxed, vigilant, never speed (usually on the highway just crusing on 100 or 110).

Numbers:

Car value: Private sale could buy another one of similar spec/km's for around $7,500 - $8,500

Full comp Premium: $1,243.85
Excess: $1150

Third Party: $347.05 ($472.05 to include theft/fire, $5,000 given)
Excess: $1150

Only covers 3k for uninsured driver.

Opinions to keep full comp or drop it

Regards,

RH

 

[kathryn d]

You need to determine how much of a financial difficulty it would be for you if you had to replace your car.

We have a 1997 Toyota rav 4, and I still keep full insurance.
I don't know if it is worth it...but I only pay $400 yr for Rob and I .

 

[skater]

You need to determine how much of a financial difficulty it would be for you if you had to replace your car.

We have a 1997 Toyota rav 4, and I still keep full insurance.
I don't know if it is worth it...but I only pay $400 yr for Rob and I .

Ours is a 1998 Rav 4. I just got my latest Insurance and it comes to around $850 to insure, and that's with a 60% no claim bonus.

I was contemplating going 3rd party only too, as even though it's a reliable car, the insurance costs are huge compared to the value of the car.

I'm presuming that your insurance is in Canada, Kathryn?

 

[Ridin-High]

Hrmmmm the way i was thinking of it.

Considering the chance of writing off my own car is low due to my driving style and history. If i was to be fully insured and my fault im up for $2393.85 and that replaces my car worth $7500. That gives me a $5106.15 benefit, each yr it doesn't happen that benefit reduces by 1200+ interest ( at the moment 7.11%)

Now the danger most likely from other drivers is being rear ended @ low/medium speed. Damage i would think that should be easily repaired for under 5k.

Even if they wrote off my car i'd only be out of pocket $2,500 an amount which i'd save over a 2yr period by having 3rd party insurance.

At the moment im more inclined to have 3rd party. Let me know what you think.

My father has a completly different concept, doesn't have any insurance on his car besides CTP

 

[Sheryn]

Hrmmmm the way i was thinking of it.

Considering the chance of writing off my own car is low due to my driving style and history.

What if it is not your fault?

Now the danger most likely from other drivers is being rear ended @ low/medium speed. Damage i would think that should be easily repaired for under 5k.

I reckon you would be wrong in your estimate with both cost of parts & labour and speed another driver can hit you at

My husband was driving home last Friday and was T-boned when someone didn't give way to him in a 50 kms zone.

We are currently carless, the accident was a heavy impact accident or as the police said to my husband a big hit, it was such a big hit that the panel beaters keep looking at the car and saying it possibly is a write off.

We paid 65K for a landcruiser ute late last year if the ute is written off we will not get 65K only market value.

I will be looking at insurance policies very closely in the future as we will be out of pocket anywhere between 3K - 15K and it wasn't our fault.

Best thing is hubby only sustained minor injuries.


Regards
Sheryn

 

[lizzie]

Now the danger most likely from other drivers is being rear ended @ low/medium speed. Damage i would think that should be easily repaired for under 5k.

if someone else rear ended you, then their insurance would pay to have your car fixed.

your insurance is only if "you" hit someone.

we've just gone thru something similar to sheryn with my step daughter. some woman ran straight up the back of her parked car (fortunately no one was inside) and wrote it off because would cost more to fix than the insurance co's "value" (term used very loosely).

to replace the car would cost around $6,000 if replacing like with like via carsales. even the red book value is around that price. the other persons insurance company offered $4,500 and refused to budge even with us supplying evidence that this was way too low!! wtf. especially considering it's also got 4 new tyres and 12 months rego.

the car is still drivable, so in the end we negotiated for them not to write the car off but pay her the $4,500. she is a poor uni student who already has a "parent" loan on the car, so is still driving around in it and we'll see how it goes next rego.

 

[Luv2Travel]

We paid 65K for a landcruiser ute late last year if the ute is written off we will not get 65K only market value.

Is it less than a year old? My understanding is that my policy with RACV is, if a new car is written off within 12 months then they replace with a brand new car. Although if your car is 13 months old then I guess that doesn't help.

 

[jrc77]

Ours is a 1998 Rav 4. I just got my latest Insurance and it comes to around $850 to insure, and that's with a 60% no claim bonus.

I was contemplating going 3rd party only too, as even though it's a reliable car, the insurance costs are huge compared to the value of the car.

I'm presuming that your insurance is in Canada, Kathryn?

Skater,

I just (two days ago) took out comprehensive insurance for my wife's new Rav4 (2010 model) and it was $780. Got quotes ranging from $780 to $1700.

Might be worthwhile shopping around.

Jason

 

[jrc77]

if someone else rear ended you, then their insurance would pay to have your car fixed.
your insurance is only if "you" hit someone.

Assuming that you get their details AND that they have insurance ....

 

[kathryn d]

Ours is a 1998 Rav 4. I just got my latest Insurance and it comes to around $850 to insure, and that's with a 60% no claim bonus.

I was contemplating going 3rd party only too, as even though it's a reliable car, the insurance costs are huge compared to the value of the car.

I'm presuming that your insurance is in Canada, Kathryn?

Yes Skater it is in Canada..and we will now be driving it only 4 months a year.
But the questions still remains..do we remove that part of insurance..I think we will allow it to remain.

 

[skater]

Skater,

I just (two days ago) took out comprehensive insurance for my wife's new Rav4 (2010 model) and it was $780. Got quotes ranging from $780 to $1700.

Might be worthwhile shopping around.

Jason

Jason, I did a lot of looking and they all came back more expensive than the current quote. If you don't mind me asking, which company gave you the cheap quote?

Not sure how true it is, but I have been told that it is more expensive to insure older cars.

 

[Luv2Travel]

Not sure how true it is, but I have been told that it is more expensive to insure older cars.

That's what I was told too from the insurance company when I went to insure my new little Mazda 2 as I was surprised how cheap it was. I think it's cheaper than my mothers old car worth a lot less than mine. The woman I spoke to, from memory, said it's to do with statistics not being available on new cars. Not sure how true that is, doesn't make a lot of sense to me.

 

[jrc77]

Jason, I did a lot of looking and they all came back more expensive than the current quote. If you don't mind me asking, which company gave you the cheap quote?

Not sure how true it is, but I have been told that it is more expensive to insure older cars.

That was with NRMA. Interestingly I did a big shop around in January for another car and NRMA was $300+ more than AAMI. Then with this one, NRMA was $300 cheaper than AAMI. Go figure. I did compare against others as well. BudgetDirect was cheaper than NRMA when I did both online - but NRMA gave a cheaper price when I rang up and spoke to them.

Jason

 

[skater]

That was with NRMA. Interestingly I did a big shop around in January for another car and NRMA was $300+ more than AAMI. Then with this one, NRMA was $300 cheaper than AAMI. Go figure. I did compare against others as well. BudgetDirect was cheaper than NRMA when I did both online - but NRMA gave a cheaper price when I rang up and spoke to them.

Jason

Hmmm......That's interesting. Mine is with NRMA and is after all the discounts. First we have the No Claim Bonus, then the Multi Policy Discounts which includes Green Slip, Home, Contents, Landlord (I think only one with them) and years of service.

 

[Strannik]

go with third party
i had same problem when i had sports car, full insurance would be around 3k, plus 1.5k excess when the car could be bought for 10k

 

[brendio]

Full comp Premium: $1,243.85
Excess: $1150

Third Party: $347.05 ($472.05 to include theft/fire, $5,000 given)
Excess: $1150

How self-disciplined are you with money? You could consider setting up a high interest savings account and each year deposit $896.80 and don't touch it, except if you have an accident and need it to repair your car. After five years or so, if you haven't had an accident you'll be better off and have that stash sitting there growing in case you ever do.

Insurance for costs with a known maximum value (in this case the value of your car if it is written off) can be effectively self-insured if your judge your risk as lower than the insurance company does and if the outlay will not put you in financial difficulty. Insurance for costs that are possibly unlimited (e.g. third party, liability) are stupid to self-insure.

I presume you are still reasonably young, which is why the difference is so great. When I first got a car, I calculated it was not worth getting comprehensive insurance because of how much it cost compared to the value of my car. When I got my latest car two years ago, I was going to do as I described above, but I was surprised that the difference was only around $100 so I decided to go comprehensive. I did have a similar self-insurance scheme going for what I would pay in health insurance, until I took out a policy before I turned 31 to avoid the extra surcharge if I took it out when I'm older. I still have my emergency stash and self-insure things like rental car excess reduction - banking what I would have to pay to reduce the excess because the amount is ridiculous compared to what it would save you if you had to claim.

 

[Ridin-High]

How self-disciplined are you with money? You could consider setting up a high interest savings account and each year deposit $896.80 and don't touch it, except if you have an accident and need it to repair your car. After five years or so, if you haven't had an accident you'll be better off and have that stash sitting there growing in case you ever do.

I was on the same train of thought. Just wack it in my offset @ 7.11%

 

[Sheryn]

Is it less than a year old? My understanding is that my policy with RACV is, if a new car is written off within 12 months then they replace with a brand new car. Although if your car is 13 months old then I guess that doesn't help.

I am also lead to believe that NRMA offers a new car repalcement up to 2 years old although I haven't actually researched this.

We should have had an agreed value not market value on our policy...


Live and learn.


Cheers
Sheryn