What car insurance coverage do I need?

October 3, 2023 9:54 AM

My car insurance seems so very high. I have a 2021 Mercedes GLA and I live in San Francisco. My insurance is about $300 a month! I think I have a lot of coverage--maybe too much. What is reasonable coverage to have in every area of coverage? I am a relatively comfortable working person who would definitely be financially devastated if I caused someone grievous bodily harm and my insurance didn't cover it. I have State Farm but am very willing to switch.
posted by bookworm4125 to Travel & Transportation (17 answers total)

Maybe discuss this with your insurance agent? They'd be in the best position to know what a "reasonable" amount of coverage is for your local area and if there are any special considerations to be aware of.
posted by RonButNotStupid at 10:01 AM on October 3, 2023

It's totally possible that $300/month is the going rate given your age, location, claim history, and car. Without any specifics (can you at least share your deductible?) this answer is necessarily general.

The most effective levers to reduce the total cost are:

• reduce the cost of coverage on your own vehicle by increasing the deductible and/or switching to a vehicle that costs less to replace or repair
• don't make claims and don't get into accidents
• shop around

Note that since you mention you would be devastated by a liability suit, it's worth mentioning that reducing your liability coverage will usually make relatively little difference to your insurance bill compared to any of the above.

I don't know if shopping around is likely to work in this case but it's worth a try. If your mileage is low, try Metromile (who charge by the mile). Otherwise spend 10 minutes trying the usual suspects: Geico, Progressive, etc. Or find an insurance agent on Yelp and ask them to do it for you.

Your suspicion that you are over-insured may be correct. The definition of "over-insured" is person-specific though. Here's mine. I only get insurance is for things I am legally obliged to insure (e.g. auto liability, health insurance), and/or outcomes that I could not personally afford (e.g. health insurance, losing all my income, me destroying someone else’s car). If I'm not buying insurance to satisfy a legal obligation or insure against an outcome I couldn't afford, then I'm really just betting against the insurance company. Insurance companies make money because they are better at betting than me. Betting against them is my defintion of over-insurance. With all that in mind, I minimize auto coverage on my own (not very valuable or expensive to repair) vehicle, mostly by having a large deductible.

This is all a very long-winded way of saying: maybe increase your deductible and shop around.
posted by caek at 10:30 AM on October 3, 2023

My insurance is less, about half for a new Subaru in a different metro area, but had a huge jump this past year for my old car: apparently there was no reason other than a rising cost of insurance. My driving record is impeccable but the increase still suddenly happened. I ended up getting a new car and the increase was then minimal. I agree with the suggestion of increasing your deductible and shopping around. I have very high coverage for collision liability and personal injury because that, too, is very important to me. What you’re paying is a lot but doesn’t sound abnormal given your location, car, and inflation. I wish you luck in finding a better price!
posted by smorgasbord at 10:35 AM on October 3, 2023

I live in Chicago. I drive a used Subaru. I have very high liability coverage because I also want anyone I might harm to be taken care of. My insurance costs approximately $600 a year.

Here are some things that make it cheaper for me:

- I bundle it with my home insurance. You'll get a bundling discount even if you just have renter's. Ask for it.

- I'm a Costco member. My Costco membership saves me multiple times the cost of the Costco membership just in insurance savings alone.

-I have a history of being a safe driver.

-I pay as much in advance lump sum as they let me (6 mos at a time) which is discounted.

-I drive less than whatever low mileage threshold my insurer has (which still sounds crazy high to me). This is something I asked for, you can ask for it too if you're not much of a driver.

-Even my a~9 years old low trim model car has a security system and a bunch of air bags, etc.

-I have a garage I can park in. Though this discount is almost negligible overall for me.
posted by phunniemee at 10:42 AM on October 3, 2023

I live in Los Angeles, I can tell you what my coverages are. They've served me fairly well.

Liability
Bodily Injury $100k/person, $300k/accident
Property Damage $50k/accident

Medical Payments
$5k/person

Uninsure Motorists
Bodily Injury $100k/person, $300k/person

Damage to Your Auto
Collision $750 deductible
Other Than Collision Loss $750

Rental
$40/day covered, $1,200 max

I always vacillate between $500 and $1,000 deductible depending on how long since someone has hit me. I don't like $750 (in fact, I have to pay it next week because someone hit my car while it was parked on my street for the, let's see . . . third time?) so I may change back to $500 next year. FWIW my company is Amica and they have been super easy and they charge me way, way, way less than what you are paying. Way way way way way way way less. YMMV based on driving history, age, not driving a 15 year old vehicle, etc.

This is a derail, but I really wish California would require insurers to provide a catalytic converter option.
posted by kensington314 at 10:59 AM on October 3, 2023

One useful caveat here is that I have no assets beyond like, my actual car. So if you have any assets you need to protect, maybe go higher. And as noted above, that coverage goes to a person's care, so no good reason to skimp on it. Cut collision coverage levels before cutting bodily harm, for example.

https://www.investopedia.com/how-much-car-insurance-do-you-need-5072121
posted by kensington314 at 11:02 AM on October 3, 2023

It's got to be the collision coverage running up the price. A new model Mercedes or any luxury brand is just going to be expensive to insure for damage. An agent can probably monkey with the coverage to dial in a better price--but obviously you'll just be less covered for damage to your vehicle. The only way around that is to either just accept that reality or get a different car that's less expensive to insure.

I have $250k/500k liability coverage plus an umbrella policy. It's not very expensive (for the liability part).
posted by mullacc at 11:18 AM on October 3, 2023

Car insurance prices can vary a lot by zip code. Like, I moved maybe five miles and my insurance rates doubled. If you're in an area with a high rate of car theft and/or a large number of uninsured drivers, that can bump up your rates a lot. A few years after the move my rate is even lower than before but I had to change companies, my car is 20 years old, and I get a low-usage/safe driver discount.
posted by mskyle at 11:22 AM on October 3, 2023

As a Canadian I carry $2 million in liability coverage and we have public health insurance. I’m not even sure you can buy this in the USA. It’s a more appropriate liability limit.
posted by shock muppet at 11:32 AM on October 3, 2023

$2m umbrella liability policies are extremely common in the US. They are tied into to our homeowner's polices.
posted by Back At It Again At Krispy Kreme at 11:39 AM on October 3, 2023

I don't have enough information to know whether your rate is reasonable or not. I am a lawyer married to another lawyer so we are both risk averse. This is what we carry for limits:

Liability $1,000,000
Medical Payments If Not Wearing A Seatbelt $10,000
Medical Payments If Wearing A Seatbelt $15,000
Uninsured Motorists
Bodily Injury $1,000,000
Property Damage $10,000
Underinsured Motorists $1,000,000
Collision Actual Cash Value Less $1,000
Other Than Collision Actual Cash Value Less $1,000
Umbrella Policy $2,000,000

This is $1000/year for my car and $700/year for my spouse. I have had one accident in the last three years, I was at fault. We have two 2013 cars, live in Wisconsin, Acuity is our carrier. We are probably overinsured but we sleep at night.
posted by notjustthefish at 11:42 AM on October 3, 2023

My deductible is $500. I just increased it to $1,000. My premium is actually INCREASING b/c I've had repairs b/c I've scratched it multiple times parking in my tight parking spot, ack! I lessened the collision coverage and miles per year. I don't belong to Costco and they don't have any kind of discount for paying up front. Lots of helpful answers; thank you! I probably will shop around too.
posted by bookworm4125 at 12:10 PM on October 3, 2023

"My premium is actually INCREASING b/c I've had repairs b/c I've scratched it multiple times parking in my tight parking spot, ack!"

Are you claiming car scratches on your insurance? I only claim stuff on insurance when the repairs are critical and going to cost significantly over my deductible of $1,000. If you are submitting claims for minor stuff then that might be why your rates are going up.
posted by victoriab at 12:28 PM on October 3, 2023

I don't belong to Costco

It's worth asking if there's a discount and what it is for any kind of club membership (AAA, Sam's Club, etc) and then mathing it out. I think my insurance savings for being a Costco member is multiple hundreds of dollars across my coverage, and at $60 for a Costco membership it pays for itself even if I never used it for anything else.
posted by phunniemee at 1:00 PM on October 3, 2023

Maybe stop filing for scratches until you can find a roomier parking spot?

I didn't claim for a smashed rear window because replacing it was close to our deductible, and even if it was more it would probably have pushed up our deductible, which was $1000.

I agree that reducing liability is not likely to reduce your premium proportionally, and would be bad for your peace of mind. notjustthefish's comment above is notable for the seatbelt/no seatbelt parsing of payments - I haven't seen that. I was once rear-ended, though, and the person at my insurance I reported it to specifically asked if I was on a cellphone, or if I saw the guy who hit me on his. I believe I had StateFarm at the time.

Slightly obliquely we claimed for water damage to our homeowners insurance right after we moved into a house. We live in a row house in a city, and water was gushing through the party wall and did A LOT of damage, including mold in our basement. It turned out we had to sue our neighbor for damages - he had a broken drain pipe - but our insurer was not liable because the leak was not originating inside our home. Still, twenty years later that claim showed on our homeowner insurance history and we pay a penalty for the small claim (they paid us back $200 for a plumber to snake a camera through our waste pipe, which verified there was no leak). We considered changing homeowners insurers and discovered that there is a shared database, and every potential insurer can see our claim history. It was an expensive mistake. The lesson is to claim only for situations you absolutely cannot pay for! And, State Farm paid for the pretty extensive repairs from the rear ending, which pushed us into another car, but refused to renew our insurance after that accident.
posted by citygirl at 1:20 PM on October 3, 2023

I live in Chicago, but in a far-out suburb and my car is garage-kept. So, there's a difference there. But I also have a new (2023) luxury car, with all the sensors and other bells and whistles, and our insurance is close to $2K a year. We have clean driving records (over the last 10 years, anyway) and have our homeowner's insurance bundled in. State Farm, too, just like you.

When we switched from a 2015 Mazda3 to a 2019 Mazda3, our rates went up only a blip. When we traded the 2019 Mazda3 for a 2023 BMW 3-series, our rates went up almost 50%. I figure it's due to all the sensors and bells and whistles being so expensive to repair.

Another data point: The car is currently in the body shop to repair front end damage from a parking lot fender-bender that happened at ~5 mph. The damage estimate was $8500.

tl;dr Your insurance premium doesn't seem crazy to me, although it certainly depends on precisely where you live. Newer cars are far more expensive to insure.

(Oh, and since you asked: Our limits are $250K/$500K/$100K liability and property damage, $25K medical payments, $250 deductible collision, and no-deductible comprehensive. We have assets we need to protect, and also have a $1MM umbrella policy.)
posted by DrGail at 1:42 PM on October 3, 2023

$300 sounds pretty reasonable for that type of car, assuming you're a pretty normal driver.

All sorts of factors goes into your rate: your zip code, your car's vintage/value/trim, your daily route (risk level), your own accident history, etc.

San Francisco is known to be a high rate area, and you have a "very new" vehicle with a name-brand that starts at 40K and goes higher. You'll need full coverage which would raise your rates even higher.
posted by kschang at 2:49 PM on October 3, 2023