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I’m a big advocate of full coverage car insurance. Car insurance like all types of insurance is for what you can’t afford to replace. Since I can’t afford to replace my car in the event of an accident, theft, or inclement weather, I carry full coverage auto insurance.
20 Years Old
It doesn’t matter to me that my car is 20 years old. It doesn’t matter to me that I paid $1,000 for it, or that it’s only worth $3,500. It’s my car, and I need it to get me to the places I need to go. The conventional thinking that if I car costs more to repair it than it’s worth then it’s time to get rid of it, doesn’t resonate with me. It’s almost always going to cost me less to fix my car than it is to replace it.
Not to mention, I drive a 1991 Caprice. The closest replacement for my car is a Cadillac, and the cheapest Cadillac on the market is $38,000. With $38,000, I could refurbish my entire car and have money left over. That’s assuming that I had $38,000, which I don’t. That’s why I have full coverage car insurance. I can’t afford to buy a new car, and in the event that my car was totaled and unfixable, I’d receive a check for at least $3000. With $3000 I can buy another used car.
Deductibles
It’s not enough that I have full coverage car insurance; I also have the lowest possible deductibles. That means that I have a $500 deductible in the case of a car accident and a $0 deductible in the case of theft. As I stated above, car insurance is for what you cannot afford to replace, and it doesn’t do me any good if I can’t afford the deductibles. It doesn’t matter to me that my monthly premium is $10 more a month. I want the peace of mind in knowing that if something happens to my car, I can financially handle it without causing myself undue hardship.
Rentals and Roadside Assistance
I’m also a big fan of rental coverage in the case of an accident and roadside assistance in the event of a breakdown. I pay for both, and I don’t mind paying for both. Having those extras means that if I get into a car accident, I will still have access to a car in the form of a rental. That’s a $35 a day value and if my car is in the shop for a week due to an accident, I save $245.
The same goes for roadside assistance. If I lock my keys in my car, having it unlocked is free. If I need a tow, my insurance pays up to $50. That’s $50 I didn’t have to spend. If my battery goes dead, I can call and have my car jumped for free. It’s those things that matter to me when it comes to my car, and it only costs me an extra dollar or two a month. That’s a small price to pay for peace of mind.
All in all, I spend about $15 a month extra for my car insurance over the cheapest plan. That’s an extra $180 a year. I can’t replace my car for $180 so the extra money spent it worth it to me.