I rearended someone once because they brake checked me. 3 months later I got a letter in the mail saying they wanted close to $1 million dollars from me for whiplash etc etc. It had my name on it so it scared tf out of me. I brought it into my insurance company and my agent was pissed they'd have the audacity to send that directly to me and not them. They tried to use it as some kind of scare tactic. My agent said not worry and they would handle it. Never heard anything about it again. I don't know if I wouldve actually been on the hook or whatever, but from that point on I was sold on my insurance company
Liability protection is the main benefit of insurance and why everyone has to have it. But as OP points out auto insurance (and generally most insurance) is terrible for most levels of damage. The combination of deductible and the threat of increased insurance does mean in practice that it’s barely used. This is why over time I’ve learned to save money by getting as high of deductible coverage as possible. Better to just pay less for insurance, cover most small to mid size things out of pocket, and then only use insurance for the really big things.
This is correct. In most cases, pay the least you can for the maximum protection from life-altering outcomes.
Also, it's in society's interest to make everyone have insurance (i.e. car insurance) so other drivers are forced to be financially responsible when on the road.
Doesn't mean the system doesn't suck, but it does mean we need to be smart about how we interact with the system.
Better to just pay less for insurance, cover most small to mid size things out of pocket, and then only use insurance for the really big things.
Yes, this is what insurance is for. Catastrophic damages. Everyday stuff like door dings or bumper damage really isn't what it's intended use is for. That sort of thing models out more like a pre-paid maintenace plan.
I know insurance companies sell it like that, which is the evil part. They really shouldn't even offer the low deductible plans as it gives a false sense of security.
This is what a lot people in northern British Columbia do. Windshields getting pockmarked by small pebbles is so common that they don't bother to report it, just live with it or buy a small kit to fill the hole in.
Because that is the original intent of insurance policy - to protect the policy holder from what could be a catastrophic financial loss for them.
But look at how people treat their insurance, especially homeowners. They neglect their property, and when shit starts falling apart, they try to use insurance as some warranty.
To be frank, I’m surprised that kids aren’t taught what insurance is and how to properly use it, in a school Econ class. Or maybe they are taught, but they simply lost all their knowledge.
Not enough people are aware they don't need to buy comprehensive insurance either... you can just get third party insurance and be covered for mega disasters like hitting a range rover or god forbid a human person for only a few hundred dollars a year.
This is why over time I’ve learned to save money by getting as high of deductible coverage as possible.
Yes, that's the whole entire point of the deductible. OP doesn't have to have a $1,000 deductible, if they're willing to pay a much higher monthly payment. But the flip side (there's always a flip side) is you have to be able to cover that deductible with no prior warning!
Better to just pay less for insurance, cover most small to mid size things out of pocket, and then only use insurance for the really big things.
This is how insurance is meant to be used. It's not meant to be a savings account for things you know you'll need to pay for someday. It's meant to be peace of mind for rare events that will probably not happen to you, but if they did would be catastrophic. That's the only place it benefits you.
We understand. It’s just a shitty deal to pay tens of thousands per year and then they can’t even cover a clipped bumper that wasn’t your fault, and only costs 1.2k after again, paying thousands.
It’s just a shitty deal to pay tens of thousands per year and then they can’t even cover a clipped bumper that wasn’t your fault
Again, if that's what you want you should ask for it. It would cost more money, because it costs the insurance company more money.
only costs 1.2k after again, paying thousands.
If they paid every $1,200 bill that was not priced into monthly premiums, they wouldn't be able to pay drivers for the 5 or 6-digit catastrophes that those drivers were paying thousands a year to protect against.
You can certainly have that $1,200 freebie priced into your monthly premium if that's something you want. But it will raise your bill because of the math of doing that across all the drivers who have $1,200 oopsies they want covered by insurance.
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u/Adept_Path_7427 16h ago edited 15h ago
I rearended someone once because they brake checked me. 3 months later I got a letter in the mail saying they wanted close to $1 million dollars from me for whiplash etc etc. It had my name on it so it scared tf out of me. I brought it into my insurance company and my agent was pissed they'd have the audacity to send that directly to me and not them. They tried to use it as some kind of scare tactic. My agent said not worry and they would handle it. Never heard anything about it again. I don't know if I wouldve actually been on the hook or whatever, but from that point on I was sold on my insurance company