Drive Uninsured for $500 -- Legally

[this_is_nascar 162]

I've never heard of this before. I wish this was an option here in the great state of NJ. As long as you're not at-fault, you should be in good shape.

 

 

http://money.msn.com/auto-insurance/drive-uninsured-for-500-dollars-legally-carinsurance.aspx

[TheDon 3]

I have not had an insurance claim since the early 1990's.

Now, with 2 SUVs to insure, I could easily save $1,500 per year going this route.

 

But, if I cause a fatal accident, I could be sued for $500K. It would take 333 years to save $500K.

I think I'll pay the insurance.

[Zell959 40]

One of the worst ideas I've heard in a while. Basically like saying "I pretty much plan to be poor forever".

 

As long as you're not at-fault...

 

"Fault" is a function of whatever a judge will let a plaintiff attorney get away with. It does not have anything to do with any sense of reason a rational person could follow and is focused solely on shaking the largest settlement out of the deepest available pockets. Assuming that safe driving means you will never end up in the cross hairs of these parisites is no less naive than assuming a house in a rich suburb is inherrently safe and doesn't need to lock it's doors.

[Scott204 1]

Wow horrible idea. condsidering a typical utility pole without transformers costs a minimum of $50,000 to replace. Like it was said before I would rather pay the insurance. Plus in NJ if you get caught without insurance and an officer writes you a ticket its an automatic 6 month license suspension.

[TheLugNutZ 21]

They have something called SAIP here in NJ (special auto insurance policy) if you qualify and are on Social Security Disability.

 

Its a buck a day, $365/yr. It only covers medical bills (PIP - Personal Injury Protection) and offers no liability coverage. And I don’t mean OUR medical bills if we are hit by someone that has this insurance, it covers THEIR medical bills ONLY. (NJ is no-fault for medical coverages so WE would go through our own PIP or health insurance coverages…)

 

Basically, if YOU OR I are hit by someone with SAIP insurance we cannot get anything out of them via lawsuit (unless they have assets we can take which is doubtful if they are on SSI) AND (here is the kicker) we have to use out own collision coverage or underinsured/uninsured coverages to cover the damage on our own vehicles AND PAY THE DEDUCTIBLE.

 

 

Im an insurance agent, and years ago when i went through the classes to get licensed and they explained this type of pol to us we couldnt fathom how its legal, but it is.

[Zell959 40]

Basically, if YOU OR I are hit by someone with SAIP insurance we cannot get anything out of them via lawsuit (unless they have assets we can take which is doubtful if they are on SSI) AND (here is the kicker) we have to use out own collision coverage or underinsured/uninsured coverages to cover the damage on our own vehicles AND PAY THE DEDUCTIBLE.

 

Most insurance carriers will still actively seek recovery directly from the driver and make their lives a little worse, but you're right that there will usually not be much chance that the funds paid out on your own insurance will ultimately be recovered.

 

Also, I was under the impression that it would still be illegal to drive without the coverages required by law in states such as NJ, which these policies certainly wouldn't provide. No?

[this_is_nascar 162]

I understand what you guys are saying, but for someone who doesn't drive much and is getting charged a boatload for insurance, this may be an alternative for them. Chances are if they can't afford "normal insurance" they probably don't have too much as it relates to possessions to be taken away anyway. I'd never sign-up for this, but it wouldn't be totally off the wall for some.

[lunker 274]

Plus in NJ if you get caught without insurance and an officer writes you a ticket its an automatic 6 month license suspension.

 

Actually, it's a 1 year automatic suspension of license. Ask me how I know.

[GRIZ 3,369]

NJ used to have an uninsured motorist fee. You'd pay twice the registration fee and didn't have to have insurance. If you were involved in an accident and you were at fault the state was supposed to pay out for the medical bills for the injured parties IIRC. The problem was that you would still be liable for property and and other damages. This went out in late 60s early 70s when no fault came into effect.

 

A problem I see is if you are in most other states you could be cited for not having insurance.

[Zell959 40]

I understand what you guys are saying, but for someone who doesn't drive much and is getting charged a boatload for insurance, this may be an alternative for them.

 

If someone is getting charged a "boatload" for their auto insurance, it's because they are in an elevated risk category [for reasons that may or may not be their own fault]. I.E. They're more likely to suffer an auto accident and be in serious trouble if they do not have adequate insurance coverage.

[this_is_nascar 162]

If someone is getting charged a "boatload" for their auto insurance, it's because they are in an elevated risk category [for reasons that may or may not be their own fault]. I.E. They're more likely to suffer an auto accident and be in serious trouble if they do not have adequate insurance coverage.

 

 

I'm not sure if that's necessarily true. Insurance rates are dictated (like it or not) by many factors, one of them being your credit-score, so I've read. You could be the best driver in the world, with no prior accidents and no reason to indicate that you're a risk, but if your credit score is low, you're going to pay a higher rate.

[TheLugNutZ 21]

Ray is correct "consumer reports" do play a part in certain types of auto insurance

[Zell959 40]

I'm not sure if that's necessarily true. Insurance rates are dictated (like it or not) by many factors, one of them being your credit-score, so I've read. You could be the best driver in the world, with no prior accidents and no reason to indicate that you're a risk, but if your credit score is low, you're going to pay a higher rate.

 

Two things

 

1) Good people can be a bad "risk" for an insurer. The fact that a car parked in Irvington is more likely to be stolen than a car parked in Madison doesn't have anything to do with the person that owns the car, but it is a factor in the likelyhood the insurance company will pay a theft claim on the vehicle and they can't afford to ignore that difference even if it isn't the owners fault.

 

2) Insurance companies underwrite based on the average claim behavior of a given group of drivers, not what they expect each specific driver to do (i.e. correlation, but not necessarily causation). It simply would not be feasible to fully investigate each driver with bad credit to differentiate between those with bad luck and those who are run-of-the-mill irresponsible idiots that make bad decisions in general. The latter of the two is a bad risk for obvious reasons and will drag down the average claim history for drivers categorized as having bad credit. It's no different that when 17 year olds are charged more than adults. Not all 17 year olds are idiots, but plenty of them are and no insurance agent can predict which is which. Other reasons those with bad credit can be a riskier driver to insure:

 

-Those with bad credit due to ongoing financial troubles probably won't always get tires/brake pads/etc replaced as often as they should

-Those with bad credit will often find their ability to buy or rent a place to live compromised, meaning they may have no choice but to live in more congested areas with hire rates of auto theft/vandalism/etc.

[TheWombat 67]

I can say first hand how using credit-score for insurance is not always sensible.

 

I have driven hundreds of thousands of miles (if not more) in my life time and never been the cause of an accident. When I relocated to the USA I had no credit history even though I brought a reasonable amount of funds with me and had a senior role in a large global organization and had excellent credit history in the UK and Australia. This meant that due to no credit history in the USA my car insurance for the first year was an absurd amount. Luckily after 12 months of living in the US my credit score had increased to make my insurance more reasonable. I believe that we are seeing a greater number of professionals moving between countries and there needs to be a better way to manage this.

 

In all the countries I have lived in I have never come across credit scores being a basis for car insurance, and while I am sure there is some correlation to risk, I still think it is not suitable in all cases.

 

TheWombat

[Vlad G 345]

Everyone is missing the other aspect though, if you have a clean record (and don't live in NJ where insurance is stupidly high) $500 might actually buy you insurance. Hell, I'm paying $1500 for two cars and two drivers, I gotta believe that a middle aged married woman with no accidents and good credit might be able to get a high deductible insurance policy for $500 in Va of SC.

[Kaiser7 33]

I wouldn't do it just because of my paranoia about certain things. I'd assume the day I go this route instead of insurance, that would be the day I'd accidentally crash into a Ferrari.

[Malice4you 627]

I wouldn't do it just because of my paranoia about certain things. I'd assume the day I go this route instead of insurance, that would be the day I'd accidentally crash into a Ferrari.

Reminds me of the story I heard years ago...guy who loaned his Ferrari Enzo to one of the car magazines, went to pick it up, and stopped at a red light on the way home. Woman behind him was on her cell phone, doesn't notice the red light and car stopped in front of her, rear-ends it and causes something like $300,000 in damage to the Enzo.

 

Musta been an interesting conversation with her insurance agent...

[Kaiser7 33]

Reminds me of the story I heard years ago...guy who loaned his Ferrari Enzo to one of the car magazines, went to pick it up, and stopped at a red light on the way home. Woman behind him was on her cell phone, doesn't notice the red light and car stopped in front of her, rear-ends it and causes something like $300,000 in damage to the Enzo.

 

Musta been an interesting conversation with her insurance agent...

I'm 20 years old, so of course my insurance is fairly high (mom pays it though, since we have a deal regarding that, long story). I only ever got in one accident. I tend to drive like an old lady, but I was about to start winter break last year, and there was 1/4 an inch of snow on the ground on my way home from Rowan.A schoolbus stopped on the opposite side of the road, and I tried braking since the cars in front of me were stopped (obviously). Well, I was going 17 mph, and down hill. I tried braking about 100ft back, but my tires locked up, and I just skidded down the hill like I was on a sled. Cost me $1200 to fix my '97 Maxima's front end. Worst part was that that was the money for my first gun XD.

 

Feel bad for the guy I hit, he got sandwiched between me and the guy in front of him. Apparently he had just gotten the car repaired about a month before.

[Secret Squirrel 3]

I think I only pay $300 a year for insurance, 23 years old. I don't complain about it.

[raz-0 1,259]

If someone is getting charged a "boatload" for their auto insurance, it's because they are in an elevated risk category [for reasons that may or may not be their own fault]. I.E. They're more likely to suffer an auto accident and be in serious trouble if they do not have adequate insurance coverage.

 

Not necessarily. IT also depends on the policy you choose. If you don't choose the limitation of liability option or whatever it is called, your rate nearly doubles. My mom always insisted on this, once I was able to separate into my own policy, the savings to me were DRASTIC, and I certainly was not in a lower risk pool at that point. Insuring a brand new 1997 Eclipse turbo cost at least $1000 less than the 88 toyota camry I had had the old policy choices on. I don't recall how cheap the camry got when I got on my own policy, I just remember all the dire warnings about how much it would cost to insure from my mom and the fact that it was less than what she had me set up for with a sensible car.

[Socom 19]

i laughed really i did

[Zell959 40]

Not necessarily. IT also depends on the policy you choose. If you don't choose the limitation of liability option or whatever it is called, your rate nearly doubles. My mom always insisted on this, once I was able to separate into my own policy, the savings to me were DRASTIC, and I certainly was not in a lower risk pool at that point. Insuring a brand new 1997 Eclipse turbo cost at least $1000 less than the 88 toyota camry I had had the old policy choices on. I don't recall how cheap the camry got when I got on my own policy, I just remember all the dire warnings about how much it would cost to insure from my mom and the fact that it was less than what she had me set up for with a sensible car.

 

Zero threshold versus verbal threshold. Yes, that will increase what you pay. Kinda figured it went without saying that better coverage options will increase the premium cost as well.

[alec.mc 180]

I think I only pay $300 a year for insurance, 23 years old. I don't complain about it.

 

 

Uhh, do you have you car registered in wyoming or something? I pay close to 300 per MONTH

[this_is_nascar 162]

I think I only pay $300 a year for insurance, 23 years old. I don't complain about it.

 

 

Are you sure you're not missing a zero in there?

[hd2000fxdl 422]

I'm at 2500 a year on 3 vehicles and 2 drivers, 2011 Escape Limited, 2011 Mustang Convertible and a 2006 Matrix. I could probably shop around and get it a little cheaper but use NJM and have for years, I pay a little more because I carry max coverage across the board. I feel a lot more coverage is worth the little extra I pay out. I really think if you under insure yourself, you are just one split second incorrect decision from being in financial ruin for a long time.

 

I'd cover my Bikes with NJM if they did bikes but I have a separate policy for them that covers extras and special items.