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But for people on lower incomes, why would they be better served with low-deductible (and expensive) policies? If they can't afford a sudden $400 expense, why i

But for people on lower incomes, why would they be better served with low-deductible (and expensive) policies? If they can't afford a sudden $400 expense, why is spending additional money each month for a more comprehensive policy a good idea? Remember, auto insurance doesn't cover mechanical failures. A perfectly valid option is to have a higher deductible, and use offset that with putting the funds that would have been needed for the more expensive policy into a general savings account. However, that does require some financial discipline and planning. And for people who make little enough money where saving that money every month isn't a viable option, they really have no business buying any sort of comprehensive auto insurance anyway. Liability only insurance is far cheaper, and provides all the protection necessary to prevent a car accident from being financially world-ending.

mcherm 7y ago
> And for people who make little enough money where saving that money every month isn't a viable option, they really have no business buying any sort of comprehensive auto insurance anyway. Liability only insurance is far cheaper, and provides all the protection necessary to prevent a car accident from being financially world-ending. You might want to consider this from a different perspective. For the well-paid like myself who has invested well and has substantial savings, a liability insurance claim that could potentially cost several hundred thousand dollars is "financially world-ending", while having to pay for repairs on my car after an accident is not. But for someone with no savings, being unable to drive their car because they cannot afford to pay for repairs after an accident may mean losing their job (public transportation isn't so great where they live) and definitely qualifies as "financially world-ending" for them. Whereas several hundred thousand dollars of liability is actually LESS of a threat -- the lawyers can quickly discover that they don't own anything worth collecting and may not even go after their assets, but even if they do, at worst it empties their bank account (which we presumed has less than 400 dollars in it).
wpietri 7y ago
This sounds painfully like somebody who is not and never has been poor.
aaronchall 7y ago
> Low/no deductible policies that cover regular issues amount to forced savings. - My insurance professor at FSU

mcherm 7y ago

> And for people who make little enough money where saving that money every month isn't a viable option, they really have no business buying any sort of comprehensive auto insurance anyway. Liability only insurance is far cheaper, and provides all the protection necessary to prevent a car accident from being financially world-ending. You might want to consider this from a different perspective. For the well-paid like myself who has invested well and has substantial savings, a liability insurance claim that could potentially cost several hundred thousand dollars is "financially world-ending", while having to pay for repairs on my car after an accident is not. But for someone with no savings, being unable to drive their car because they cannot afford to pay for repairs after an accident may mean losing their job (public transportation isn't so great where they live) and definitely qualifies as "financially world-ending" for them. Whereas several hundred thousand dollars of liability is actually LESS of a threat -- the lawyers can quickly discover that they don't own anything worth collecting and may not even go after their assets, but even if they do, at worst it empties their bank account (which we presumed has less than 400 dollars in it).

wpietri 7y ago

This sounds painfully like somebody who is not and never has been poor.

aaronchall 7y ago

> Low/no deductible policies that cover regular issues amount to forced savings. - My insurance professor at FSU