Car insurance for a new resident

[annaegel]

If you can get it, NJ Manufacturers is a great insurance company. I worked for a hospital and I was able to get on it. They are a not-for-profit insurance company. We would often get money back at the end of the year. We made only one claim and they responded great. I don't know what kind of work you will be doing, but check it out anyway.

You have to work for a place that manufactures something or work for a hospital. Once you are on it, you stay on it, even if you no longer work for the company that allowed you to be on it, unless you move out of state like I did.

[spudd]

Thanks for all the advice.
I'm thinking that perhaps buying a slightly older/cheaper model might be a way to reduce the premium. Does the age/value of the car make a huge amount of difference to the cost in the US, if the driver has been rated as "inexperienced" anyway? (the difference in value I'm talking about here would be between buying a car for $15k versus $25k)

[G.Costanza]

Originally Posted by annaegel

If you can get it, NJ Manufacturers is a great insurance company. I worked for a hospital and I was able to get on it. They are a not-for-profit insurance company. We would often get money back at the end of the year. We made only one claim and they responded great. I don't know what kind of work you will be doing, but check it out anyway.

You have to work for a place that manufactures something or work for a hospital. Once you are on it, you stay on it, even if you no longer work for the company that allowed you to be on it, unless you move out of state like I did.

Basically - from what I understood - you need to work for a company in the NJBIA association, or for the state of NJ. However, once you've joined NJM as a policy holder, you can renew (or rejoin, if you leave) even if you're no longer employed at such co.

BTW, they are a mutual insurance company (not a not-for-profit) which simply means the company is owned by their policyholders, not shareholders. While many people have had good things to say about NJM, let's not overstate the point. They are not the only mutual ins co in the US or in NJ. There are many others, and mutuals do not always provide you the lowest premiums.

Originally Posted by spudd

Thanks for all the advice.
I'm thinking that perhaps buying a slightly older/cheaper model might be a way to reduce the premium. Does the age/value of the car make a huge amount of difference to the cost in the US, if the driver has been rated as "inexperienced" anyway? (the difference in value I'm talking about here would be between buying a car for $15k versus $25k)

When you break down the total of your premium, you'll see the separate amounts you're paying for liability, PIP, comprehensive, collision, etc. The difference in value of the car you're talking about (15 vs 25) isn't going to make an absolutely huge difference.

If you really need to save a big % on your premiums, you can buy a much cheaper car and altogether forego the comprehensive and collision coverages. This means you won't be compensated in the event of theft, fire, vandalism, etc. (comprehensive) and if you're at fault in an accident (collision).

I did this when I first got a car. While it doesn't sound great when described as above, why would you want to pay say $1k more per year to protect a car worth say 5k? You'd be better off saving that money as a personal "insurance" policy knowing that a total loss is usually quite unlikely.

A min level of liability protection is mandatory on any policy, so you can't forego that. If anything, if you have decent assets and/or income, you're probably better off paying a bit more in insurance to increase your liability protection (heaven forbid you are deemed at fault and the other party sues you).

[spudd]

you're probably better off paying a bit more in insurance to increase your liability protection

ok, this is interesting, you choose the amout of liability protection you'll need?

Isn't the point of having insurance, the company takes that risk? ...how can an individual know how much liability cover they'll need. They'd need to know that they were going to have an accident and how much damage they'd cause.

Generally, does everybody just select the highest amount available to be on the safe side?

[G.Costanza]

Originally Posted by spudd

Isn't the point of having insurance, the company takes that risk?

The ins co takes the risk - up to the coverage level in your policy. No ins co takes unlimited risk.

Originally Posted by spudd

how can an individual know how much liability cover they'll need. They'd need to know that they were going to have an accident and how much damage they'd cause.

Car insurance is just like other protective policies or insurance (life, health, home, etc.). It's there to protect you in the event of an unforeseen and/or catastrophic incident. You don't get auto ins "knowing" you're going to have or cause an accident, any more than you get life ins "knowing" you're going to die this year.

Originally Posted by spudd

Generally, does everybody just select the highest amount available to be on the safe side?

I don't know what generally happens, but I doubt the above. It requires a much more proactive thought process and the willingness to spend more money than "required." If I had to guess, I suppose most people just go with the default level offered in their ins quote or the min level. Then again, most people don't have a ton of assets/income that could be targeted in a lawsuit seeking damages way above the min liability $ level.

What level of coverage you need is a cost/benefit compromise, like many things. You have to figure out what you're comfortable with and how much you have in assets worth protecting.