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As any NJ resident knows, car insurance is astronomical in the state.
Due for renewal soon and was thinking of lowering my coverages to save some money. My situation:
Liability Coverage : $300 K
Uninsured Motorist: $100 K
Personal Injury Protection $250 K
Collision & Comp Deductibles: $500
NO Limitation on Lawsuit option ( this adds nearly more than a 1/3 of policy cost but the other option greatly restricts when you sue for injuries, health issues from accident - not willing to change this one).
I'm planning on reducing amounts for liability, personal injury protection (primary coverage is by my health insurer so this doesn't apply until max coverage is reached under health ins.) and raising the deductibles.
Has anyone drastically reduced their coverages to save money?
Also concerned if anyone has any horror stories dealing with the limitation on lawsuit option (i.e.; experiences being denied compensation or coverages for a serious injury).
You should definitely raise your deductibles if you are someone that is not prone to accidents. I have been driving for over 20 years and have never had an accident, so I keep my deductibles high. If you have an older car you can drop collision coverage entirely as it likely won't be worth fixing in the event of a major accident.
I assume you have already shopped around? I use Geico.
I would suggest shopping around various insurers and maybe 50/100/50 or something higher in between.
Rates seem to vary relating to your driving record, age, residence, marital or professional status value of car, etc but can vary from carrier to carrier,
If you have any assets, I would not lower the liability. I think the collision and deductible level has more impact than the liability portion and you could lose your house and any other assets if you are found responsible in a serious accident.
If you can afford to replace your car- I would lower or cancel the collision and raise the deductible. We opt to take very high deductible, but we have very high liability coverage AND an umbrella for the car and house liability.
With the prices of repairs on cars these days... its not worth it IMO.
Last year I decreased my collision deductible from $1000 to $500. Two months later a NYC cab does a hit and run where the estimate came out to $2100. I was sure glad I had lower the deductible.
If you are the type of person who puts away whatever savings you will get, I guess it would be fine. But if you are not, I would think twice.
If you have any assets, I would not lower the liability. I think the collision and deductible level has more impact than the liability portion and you could lose your house and any other assets if you are found responsible in a serious accident.
If you can afford to replace your car- I would lower or cancel the collision and raise the deductible. We opt to take very high deductible, but we have very high liability coverage AND an umbrella for the car and house liability.
We have the liability & uninsured motorist portion at the max $500k, $250K PIP and $1k deductible on 2 cars. Considered a $1M umbrella (costs $250/year) but haven't acted on it yet nor have I done enough research to determine if an umbrella is warranted.
To answer the OP's question, no we will not reduce coverage to save $ except when it makes financial sense to do so (ie. drop collision on a car that's worth less than ~ $3k). Our annual premium for both cars is $1,600 through NJ Manufacturers. 1 car is worth about $30K and the other is $4k (another year or so and I'll drop the collision on this car).
Not to turn this into an umbrella policy discussion but this is the kind of thing that scares me and is a good reason why not to lower coverage... :
"An individual was involved in a minor accident on his way to an airport. Both he and the driver of the other car agreed they felt fine and didn’t need police assistance – until his relative arrived in a $200,000 car to help him catch his flight. Suddenly, the other driver complained of pain and insisted they call the police. The case was eventually settled for a substantial sum.”
"The right umbrella amount depends on where you live, your profession and your aversion to risk. Liability coverage in home and auto policies rarely exceeds $500,000, yet 13% of personal injury liability awards and settlements are $1 million or more, according to the report, citing data from Jury Verdict Research. The amount of coverage you choose should bear some relation to your net worth. But note: if you’re worth $1 million, a $1 million umbrella is not going to protect you from a $2 million legal judgment, since it would still be worth a lawyer’s time to go after your personal assets. So even if your net worth is below $2 million, you should consider a $2 million umbrella.
Don’t skimp on coverage. Coverage at least equal to your current net worth is the typical recommendation. However, if coverage falls short, a judge could order you to pay up, liquidating savings and investments (retirement plans and trusts are usually safe), real estate and personal property—and even garnishing your wages. Consider adding coverage to equal the present value of your employment income stream."
The cost difference between a $250 deductible and a $1,000 deductible for me was $36. you'd have to go 30 years without a collision claim for that to be worth it.
my two vehicles to insure are $1700/yr (legacy gt - turbo, acura tsx).
We have the liability & uninsured motorist portion at the max $500k, $250K PIP and $1k deductible on 2 cars. Considered a $1M umbrella (costs $250/year) but haven't acted on it yet nor have I done enough research to determine if an umbrella is warranted.
To answer the OP's question, no we will not reduce coverage to save $ except when it makes financial sense to do so (ie. drop collision on a car that's worth less than ~ $3k). Our annual premium for both cars is $1,600 through NJ Manufacturers. 1 car is worth about $30K and the other is $4k (another year or so and I'll drop the collision on this car).
Thanks...I have NJM too but my costs are much higher since I have 2 young male drivers on policy (although both with 10+ yr old cars).
If you don't mind me asking, do you have the No Limitation option or Limitation Option?...your premium seems pretty low so I'm assuming you have the Limitation option which decreases premiums by a 1/3 or more. This is the biggest cost driver and I was told by NJM adviser that the change that would make the biggest impact on my premium would be to lower this to the Limitation option. However, based on advice from a family friend/attorney we are not willing to do so.
"Under a no limitation on lawsuit policy, you are compensated for all your injuries should you become involved in an automobile accident. You will be compensated by the person who harmed you for your lost wages and for the pain and suffering of you and your family. Under this threshold, you retain your constitutional right to a jury trial if you are injured in a car accident."
"The Limitation on Lawsuit costs less from an insurance standpoint. However, if involved in an accident you stand to lose much more. If you want to protect yourself from a negligent driver select the No Limitation on Lawsuit threshold. Don't be fooled by false savings. ---
under the lawsuit limitation policy, one may sue only under the following circumstances when involved in a car accident: death, dismemberment, significant disfigurement or scarring, displaced fractures, loss of fetus or permanent injury. Permanent injury is defined as when a body part has not and will not heal to function normally with further treatment and confirmed by diagnostic testing."
Also, you say you have $250K PIP....is NJM your primary coverage or your health insurer? I have my health insurer as primary....NJM is secondary to that (i.e.; they don't pay out anything until I reach & exceed my health insurer's max payout).
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