(952) 222-3486 chris@therockinsure.com

In writing and servicing auto insurance I often get the question, “Should I have full coverage or just liability coverage on my  vehicle?” The answer of course is not always so cut and dry, it depends on a number of factors. The first one being the value of your vehicle. I always tell people to go to Kelly Blue Book and look up the value. At this point you can figure that if you totaled the vehicle they would likely pay out about 75%.

The other factor is your deductible. Let’s say you have a 2003 Toyota Camry and Kelly Blue Book says it is worth $2,000. If insurance pays out 75%, it will pay out $1,500. Now you have to figure if you have the standard $500 deductible, then it will pay out $1,000.

Most people would say sure, I would want that. But there is another factor, the amount your insurance will go up a year after filing a claim. If the claim is your fault you will likely look at between $20-$30 a month increase for the next five years, and this just depends on the carrier. I have actually seen more especially if combined with a ticket like speeding. But let’s say it just goes up $20 a month, then that would be $240 a year and over $1,000 over the next five years. Not to mention you are likely paying $20 a month to have full coverage.  So in this case, it would really not be worth it.

In the end it is really up to the customer and what they can afford if their car is totaled. My general rule of thumb is if you can afford it, I would not carry full coverage on a vehicle unless it paid out at least $2,000 in a claim if totaled. If it doesn’t I would really consider dropping the full coverage, save that money each month and if something does happen just pay out of pocket.

If you have any questions about this or any other insurance questions, please email me at chris@therockinsure.com