3 ms·

Liability insurance is based on other people’s cars. Comprehensive and collision is based on your own car.

by seanmcdirmid 3y ago

xapata 3y ago
Liability is more about medical costs, no? If it were bounded to vehicle cost, I'd self-insure.
- seanmcdirmid 3y ago
  I’m sure car insurers pay out significantly more for vehicle damage than person damage. Most accidents don’t involve harm, but body shops are getting expensive. For WA: > In 2019, there were 45,524 reported car accidents in Washington State. Although 32,106 resulted in no injuries, 325 were fatal and 973 resulted in serious injuries. https://www.weierlaw.com/dealing-with-an-auto-accident-in-washington-state/#:~:text=Washington%20State%20Car%20Accident%20Statistics,973%20resulted%20in%20serious%20injuries https://www.weierlaw.com/dealing-with-an-auto-accident-in-wa....
  - bombcar 3y ago
    The first dollar of insurance coverage is the most expensive, because any claim hits it. Going from $100k to $2m is often quite cheap, comparatively.
    - seanmcdirmid 3y ago
      The number of claims over $100k are much less frequent, which is why it is cheaper to raise your cap.
    - xapata 3y ago
      It seems like the ideal plan is a high-deductible with no maximum, like catastrophic medical coverage.
  - xapata 3y ago
    I'd bet that the median claim is quite different than the mean claim, because the outliers are so large. Much like the "shocking" statements you hear about wealth distribution -- the largest 10 are bigger than the bottom 50% or similar. That's how log-normal distributions work. Though of course the Gini coefficient can vary.
- Marsymars 3y ago
  I've wondered what happens if I have an at-fault collision where I total a hypercar whose value exceeds my maxed-out $2 million liability coverage. Can the car owner come after me for the difference?
  - toast0 3y ago
    Yes, you're ultimately liable for damages you cause. I would expect your insurance to ask the damaged party to release you from further liability as a condition of accepting settlement at the coverage limits, but if the damages are significantly over the coverage limits and it seems likely that they could significantly collect on a judgement beyond your coverage, it's a possibility. Umbrella insurance can go up to much higher limits ($2M is maybe already be an umbrella policy), sometimes up to $10M is easy to get, and depending on your insurer, often the upper millions are much less expensive. The tail risk is pretty small. If you're worried about it, may as well ask for quotes at $5M and $10M.
Scoundreller 3y ago
> Liability insurance is based on other people’s cars. This is what I dislike about insurance. If someone hits my (hypothetical) $100k car and ruins it, I win $100k, but if someone hits my $1k car, I only win $1k. Yet the person that hit me did precisely the same action/error.
- lotsofpulp 3y ago
  Insurance is not a punitive fine or lottery. If someone drives into your house and causes $100k in damage, you would also get $100k (assuming the minimum legal coverage is that high, which it might very well not be in many or even all states). I specifically recall New Jersey letting poorer people drive “insured” by letting them purchase insurance for effectively fender benders, and if they caused more damage, good luck pursuing them.
  - Scoundreller 3y ago
    > Insurance is not a punitive fine or lottery It functions as one, regardless of intentions. You could also look at this the other way: the person driving the rust-bucket with 0 functioning airbags might win more injury compensation than the individual driving something solid with 9 airbags and walks away.
    - Horffupolde 3y ago
      That’s called moral hazard.
- vkou 3y ago
  The point of insurance is to make you whole, not to make you better off. If it did, you'd have more incentives for insurance fraud. (Also it's the other guy's insurance that pays for it, and if the insurance industry disappeared overnight, and you had to sue for damages directly, no judge would award you more than the damages you sustained. (For an honest accident.))
- eiderman 3y ago
  A big problem at the lower end is that insurance companies don't value cars based on their utility. I have a well maintained older car that is reliable and I trust the work that has been done, but it would be valued at around $2k by insurance. In order to buy a car with similar reliability would be closer to $5k. If someone else hits my car, it will be probably totaled at current repair prices and so I will have lost ~$3k.
SoftTalker 3y ago
It's based on a whole lot of things. Drivers of Ford Mustangs may be involved in more accidents than drivers of Toyota Corollas. The number of miles you drive, and for what purpose, and your personal accident history, and your age and sex and marital status and whether you live in an area with snow and ice in the wintertime or not, all factor in to the rate you are charged.

Liability insurance is based on other people’s cars. Comprehensive and collision is based on your own car.

xapata 3y ago

Liability is more about medical costs, no? If it were bounded to vehicle cost, I'd self-insure.

seanmcdirmid 3y ago
I’m sure car insurers pay out significantly more for vehicle damage than person damage. Most accidents don’t involve harm, but body shops are getting expensive. For WA: > In 2019, there were 45,524 reported car accidents in Washington State. Although 32,106 resulted in no injuries, 325 were fatal and 973 resulted in serious injuries. https://www.weierlaw.com/dealing-with-an-auto-accident-in-washington-state/#:~:text=Washington%20State%20Car%20Accident%20Statistics,973%20resulted%20in%20serious%20injuries https://www.weierlaw.com/dealing-with-an-auto-accident-in-wa....
- bombcar 3y ago
  The first dollar of insurance coverage is the most expensive, because any claim hits it. Going from $100k to $2m is often quite cheap, comparatively.
  - seanmcdirmid 3y ago
    The number of claims over $100k are much less frequent, which is why it is cheaper to raise your cap.
  - xapata 3y ago
    It seems like the ideal plan is a high-deductible with no maximum, like catastrophic medical coverage.
- xapata 3y ago
  I'd bet that the median claim is quite different than the mean claim, because the outliers are so large. Much like the "shocking" statements you hear about wealth distribution -- the largest 10 are bigger than the bottom 50% or similar. That's how log-normal distributions work. Though of course the Gini coefficient can vary.
Marsymars 3y ago
I've wondered what happens if I have an at-fault collision where I total a hypercar whose value exceeds my maxed-out $2 million liability coverage. Can the car owner come after me for the difference?
- toast0 3y ago
  Yes, you're ultimately liable for damages you cause. I would expect your insurance to ask the damaged party to release you from further liability as a condition of accepting settlement at the coverage limits, but if the damages are significantly over the coverage limits and it seems likely that they could significantly collect on a judgement beyond your coverage, it's a possibility. Umbrella insurance can go up to much higher limits ($2M is maybe already be an umbrella policy), sometimes up to $10M is easy to get, and depending on your insurer, often the upper millions are much less expensive. The tail risk is pretty small. If you're worried about it, may as well ask for quotes at $5M and $10M.

Scoundreller 3y ago

> Liability insurance is based on other people’s cars. This is what I dislike about insurance. If someone hits my (hypothetical) $100k car and ruins it, I win $100k, but if someone hits my $1k car, I only win $1k. Yet the person that hit me did precisely the same action/error.

lotsofpulp 3y ago
Insurance is not a punitive fine or lottery. If someone drives into your house and causes $100k in damage, you would also get $100k (assuming the minimum legal coverage is that high, which it might very well not be in many or even all states). I specifically recall New Jersey letting poorer people drive “insured” by letting them purchase insurance for effectively fender benders, and if they caused more damage, good luck pursuing them.
- Scoundreller 3y ago
  > Insurance is not a punitive fine or lottery It functions as one, regardless of intentions. You could also look at this the other way: the person driving the rust-bucket with 0 functioning airbags might win more injury compensation than the individual driving something solid with 9 airbags and walks away.
  - Horffupolde 3y ago
    That’s called moral hazard.
vkou 3y ago
The point of insurance is to make you whole, not to make you better off. If it did, you'd have more incentives for insurance fraud. (Also it's the other guy's insurance that pays for it, and if the insurance industry disappeared overnight, and you had to sue for damages directly, no judge would award you more than the damages you sustained. (For an honest accident.))
eiderman 3y ago
A big problem at the lower end is that insurance companies don't value cars based on their utility. I have a well maintained older car that is reliable and I trust the work that has been done, but it would be valued at around $2k by insurance. In order to buy a car with similar reliability would be closer to $5k. If someone else hits my car, it will be probably totaled at current repair prices and so I will have lost ~$3k.

SoftTalker 3y ago

It's based on a whole lot of things. Drivers of Ford Mustangs may be involved in more accidents than drivers of Toyota Corollas. The number of miles you drive, and for what purpose, and your personal accident history, and your age and sex and marital status and whether you live in an area with snow and ice in the wintertime or not, all factor in to the rate you are charged.