Liability is everything, the cost of the car is nothing. Get the umbrella policy on your house. Buy liability insurance when you rent a car.
It's not just the medical bills- it's also the legal damages.
They gave me $15k. I went from a beautiful 2008 Lexus IS350 to a $2500 2001 Honda CRV because I had no money to buy a car with other than the cash I had left over in my bank through bo fault of mine. It was actually even worse with lot fees after the police found the car and impounded it, etc. But that's another story.
GAP covers that, and car thefts are up at a massive scale now. I get GAP on every car and if the dealer has some anti-theft option I get that too. I bought a car last week and I think it was $900 and if the car is ever stolen or wheels stolen over 5 years I get something like $5k cash. I'm also going to put a DroneMobile system in it.
Don't get a car stolen. Garage it if you can. I used to have that "USAA will cover me! hehe! no worries if it's stolen!" naivete until it happened.
I seriously can't explain how rude they were to me. Had a fraud investigator come to my house and grill me in the most despicably rude way possible. They acted like I tried to get it stolen or something to get out of the car payment. "I've had this car since it was new, never missed a payment, and I I'm still employed making $YZ money. Why would I try to get out of my payment by .. hiding my car? Leaving it open to steal?" I'm not kidding. It got stolen when I walked into a Walgreens to buy a frozen pizza.
Maybe it's what they all do, but it sucks. And it's not what a lot of people expect.
I was maybe 23 and definitely didn't have money for legal help. I hate how I let myself get treated.
We were insured with Travelers.
I’ve wondered since then if that’s how it usually works out, or if we were a lucky fluke.
I have two "new" cars (2019 and 2021 model years) that I've had since they were less than a year old, and have new car replacement on both.
Travelers is relatively unique in that their new car replacement is up to 5 years, not 1 as most are (some go to 2 or 3). NCR also integrates gap coverage.
If my 2021 RS 5 gets totaled two years from now, I get a check for 110% of the MSRP for a 2026 RS 5.
As such I could definitely buy a replacement with the payout.
While I'd much rather be without the experience, I was almost pleasantly surprised by the insurance company.
The whole thing was an absolutely miserable experience completely stacked against any sort of reasonable resolution, and USAA was caught in so many lies it still irritates me years later. I'm sad that this is so clearly a continual process for people day to day.
Further, what does “worth” mean if you can’t take the amount of money you were given and easily purchase a car of the same make, model, year, and condition?
My two cars now have new car replacement coverage for 5 years that also wraps in gap coverage.
My last car loan was at 0% (meaning the only cost of financing was the insurance company profit on the collision policy that I had to take because of the loan). No way am I putting down 40% on a 0% loan.
I could have charged the car on my credit card for the points and paid it off 45 days later; it’s not a matter of being able to afford it.
But I agree. A lot of these problems are solved by not buying such expensive cars.
It's not just expensive cars, people are putting tiny down payments on cheap new cars financed for long terms and they're under water for years.
This isn't /r/frugal fwiw.
I’m talking about the people buying cars for transportation who are in a financial situation for which GAP insurance might be a concern.
It's not smarter to bypass Apples 0% interest financing on a $3500 macbook or VR headset than drop the $3500 that will now make %0 interest for you immediately.
Some of you (all of us?) were taught some moral/ethical line about not incurring debt by our ignorant boomer parents who follow the "don't ever be in debt!!!" mantra, which is literally impossible nowadays. And they are INSANELY in debt. Almost every boomer home owner has a reverse mortgage!! Your boomer parents were rich at $50k. We are not. My boomer parents had a $150k 3500sq ft house. I have a $3100/mo 1300sq ft townhouse. Living good on that $.79 Clinton gas.
Learn financing.
I pay my boomer parents rent now because they royally fucked up their finances. Do not listen to boomers for financial advice. And I mean the bobbleheads on TV as well. I guarantee a LOT of you will be paying your parents rents soon. My moms 71. They were stupid beyond belief with their money. Just remember all the trash they bought in the 1990s, 454 cubic liter 2500 HD suburbans? Hummers? Massive houses?
Go torch your Kiyosaki books and everything else and throw that $1500 Camry you've driven for 35 years in the trash and spend the whopping $20k on a modern car that can survive a collision and enjoy your life. Who gives a fuck if you're rich at 75 when you can't do anything, that new cars compound interest isn't saving your retirement or not.
Still, I also buy cars used. But I go ~10 year old, from a reputable low maintenance brand and model.
It probably helped that it was a cut and dry case - the thief took the keys from inside my house and I called the cops seconds after I saw him drive away with it.
Agreed. I'm a personal finance nerd, and it felt like an epiphany when I discovered this a few years ago, because it's rarely discussed but seems so important. I max out our UM/UIM coverage now.
Side note: My wife is a stay-at-home mom and I've long wished for a disability insurance product that would cover the economic value that she provides, i.e. cover the cost of daycare / after-school care if she couldn't care for the kids. As far as I can tell, there's no such product for people who aren't wage earners. The closest thing I've found is UM/UIM coverage, since the most likely cause of disability is a car crash. Presumably it would pay for at least some of the other things beyond medical bills.
> Buy liability insurance when you rent a car.
Why do you say this instead of just relying on the liability coverage under your regular auto insurance?
There is absolutely disability insurance for homemakers and non income spouses in the USA. I've written that exact policy both individual and for employers / employees.
AD&D (accidental death and disability) is the closest you’ll come. It’s most commonly offered by workplaces I believe, and is not expensive. On the flip side the situations it pays out are pretty narrow.
The only other alternative I know of is life insurance but of course that covers death, not disability.
This is the problem. Those policies usually cover “unable to work at all” which is extremely narrow (some won’t pay out if you can do any job anywhere, even if you were a doctor lawyer 10 programmer CEO before).
You can find a policy to cover stay at home spouses, but they’re often somewhat custom, expensive, and only pay out until children are X age. Long-term care can also be added, even more.
Like the employer offers coverage that extends to a non-employee spouse, like family health insurance?
I remember finding one product sold to individuals including stay-at-home parents a few years ago by Bright Peak Financial. Now I can't even get their website to load to see any details, so maybe it doesn't even exist anymore, but the coverage limits were pitifully low. Like it would cover only fraction of our childcare costs, and only for a time measured in months.
We definitely have term life coverage on her that will run until our youngest kid is a teenager.
Yes. I believe it’s typically offered for just you, you+spouse, or you+family - like health insurance. Lots of info on Google.
>stay at home mom
I'm in the same situation, it sure would be nice. We do both have life insurance at least.
>Why do you say this instead of just relying on the liability coverage under your regular auto insurance?
To be careful. If you don't buy it, make absolutely sure that your own auto insurance covers it. [also people who don't own a car won't have auto insurance..]
- a 1200 dollar deductible on a car worth 4 grand is a life ruin-er for some people.
-if insurance decides to total your vehicle and you have to dispute the value, absolute nightmare.
Personal story,
I am 7 months in awaiting my court date for an uninsured dude that totaled my buddys car I was driving. It's my buddys extra car, no UIM or comprehensive coverage. I paid 7 grand to fix it out of pocket, because his insurance would have totaled it and charged him deductable. car is valued around 4k or so, despite being the cleanest 0 legacy on the planet. all new paint, mechanic owned. Other motorist hasn't paid a dime and is ignoring all court orders.
Insurance has done fu** all for all of this.
Because if another driver hits you and that driver was insured to cover all the damages they caused then their policy would cover you and you'd never have to make a claim on your own policy.
There's a lot of different types of insurance you can buy:
Liability - this is mandatory. Covers damages paid to other people caused by you.
Everything else is, typically optional.
Collision - Covers damages to your car paid to you caused by you.
Comprehensive - Covers "act of God" situations paid to you like tree falling on you car, hail damage.
Uninsured/underinsured coverage - Covers damages paid to you caused by other people who weren't carrying enough insurance to fully cover the loss.
Those are different risks and not everyone wants coverage for all of them.
Why wish for people to be imprisoned?
(Theoretically, you might be able to get money back if it's a rich person who loves the thrill of driving without insurance or something. Theoretically, you could also find a winning lottery ticket on the sidewalk after the crash.)
Hit and run can be a grave crime. You might be leaving someone for dead.
Because they're the disposable element of the population who does hit-and-run accidents.
The only monetary payout we got was our uninsured motorist coverage. (Seeing the lady who hit her get arrested at the scene and taken to jail was nice. Our insurance company pursuing her in court was also nice, too, though having not been thru the experience before we were taken aback when my wife unexpectedly received a summons to testify.)
I max'ed out our uninsured driver coverage after that.
They own nothing and are happy. Or in jail.
It’s called being judgement proof and basically lets you ignore civil penalties.
Life is so much simpler, yet more satisfying, now that I've lived long enough to secure away a few assets. God willing, we'll all live long enough to not be the pieces of shit our youth/ignorance once allowed.
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I read the other day that 20% of male Millenials are currently uninsured.
As someone with two kids, can I ask, does health insurance not work in this situation? I ask partly because at the moment we own no cars. If health insurance doesn’t cover it I’m wondering how we should insure.
Anyway, yes health covers it but they are first in the line getting reimbursed, even before the lawyer- which I think sucks, I mean what am I paying them for?
The reimbursement right that the insurance company has is called subrogation. The basic idea is that whoever was at fault shouldn't be better off because the injured party had insurance; otherwise it would be rational for individuals to not have insurance as long as most other people do have insurance. Subrogation means someone will still sue you into the ground even if the person you hurt was made whole by insurance. There can be many links in the insurance chain before you get to the person who actually caused the problem, and in your case it sounds like UMC was the final link.
At least, this is the stated public policy reason for subrogation. You are right that your health insurer got reimbursed even though they promised to cover your loved ones, and that feels weird.
Sorry about the incident. Do you mean the health-insurance company tries to get reimbursed? From who? the auto-insurance of the other driver?