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 Posted: Sat Feb 28, 2009 3:08 pm Post subject: auto insurance collision deductible costs |
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Hi Everyone,
I just have a question for everyone. Right now the average American has only $620 in their Checking Account and Negative Savings. If you or someone on your insurance policy had an at fault accident today How would you pay for your auto insurance collision deductible?
Which option would you choose?
1) Use a high Interest Credit Card or Short Term loan
2) Beg for money From a Family member or Friend
3) Leave your car broken
4) Use what little money you have and try to make ends meet
I have been asking this question to a lot of people and wanted to see what people in other areas of the USA would do.
Thanks
Ryan |
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greeryan
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| Posted: Sat Feb 28, 2009 3:53 pm Post subject: |
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| I think by now everyone should relize the economy is sliding and has been for a couple years. Most Americans should be able to have slid a few dollars a month aside to put in their savings for such things as auto insurance collision deductible. For those who have not I would leave maybe a part of the car broken. Small thin gs can add up to a lot of money. Skipping on a new fender or any other eye sore may save your vehicle insurance collision deductible money. You can always replace it later. |
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fireyone
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| Posted: Sat Feb 28, 2009 3:54 pm Post subject: |
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| #2, then #4, then #1, then #3. But most people have a $500 auto insurance collision deductible so $620 in a checking account would cover that. Also, most people can easily shave off some money from their spending. |
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tcope
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| Posted: Sat Feb 28, 2009 4:10 pm Post subject: |
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Another option is trying to get an appearance allowance or not repairing 'part' of the damage...
to answer your question if i were an 'average' american per your example..most likely i would first ask the shop if they offer any payment plans (many do)...then I would go to #4...ending with #2 I'd likely walk before I resorted to #2...
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Lori
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| Posted: Sat Feb 28, 2009 4:11 pm Post subject: |
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What I find interesting is that most of the people that I have talked to said that they would leave it broken for a while until they could afford to fix it. I think for most people an auto insurance collision deductible of $500 would break them financially
I'm interested in seeing how everyone responds to this I feel it would be an interesting view on how the economic crunch is affecting people.
Ryan |
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greeryan
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| Posted: Sat Feb 28, 2009 4:22 pm Post subject: |
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Ryan, there is no question that the economy has definately affected the way people are repairing (or not) their vehicles....I've never seen so many people take the money and not fix vehicles...of course many times it's not an option some repairs must be made on some vehicles to make them driveable at all....there also has always been a pretty good percentage of folks that struggle to come up with their auto insurance collision deductible...even prior to the current economic crisis....many (unfortunately) end up leaving their fully repaired vehicle set at the shops for months until they get the money....also I think this is the reason many shops have adopted payment plans...one of the bigger (and wiser) shops I work with routinely many years ago partnered with a finance company....and can get the deductible financed thru these finance companys for the owner, granted the interest rate is probably nuts....but when you're stuck you're stuck...and the majority of these poor folks can afford to pay 75 a month for a year to repay their 500 deductible to the finance company.
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"Never, never be afraid to do what's right, especially if the well being of a person or animal is at stake. Society's punishments are small compared to the wounds we inflict on our soul when we look the other way." Martin Luther King Jr.
Last edited by Lori on Sat Feb 28, 2009 4:33 pm |
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Lori
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| Posted: Sat Feb 28, 2009 4:27 pm Post subject: |
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| The shop payment plan is a good idea. I still would leave a part of the car broken if I had no other option. As long as it was running good and it was not a safety issue then it would get you to work so that you could save the extra money to finish the repairs. One lesson we all need to learn from the fall of are economy is to get a little savings back. I know it can be rough cause I have been through it enough but shaving a little off here and there really can help build a little nest egg for emergencies. |
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fireyone
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| Posted: Sat Feb 28, 2009 4:44 pm Post subject: |
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you are 100% on target fire...and I'd guess that 99.99999% of the time, there is something you are wasting money on every month that can be put back even if it's 5 bucks a week...that is something to start with.
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"Never, never be afraid to do what's right, especially if the well being of a person or animal is at stake. Society's punishments are small compared to the wounds we inflict on our soul when we look the other way." Martin Luther King Jr. |
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Lori
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| Posted: Sat Feb 28, 2009 4:53 pm Post subject: |
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| Life can teach you this lesson fairly quickly. I just learned it myself a while back and believe me when the wheels started turning I found all kinds of ways to start a little savings. It stunk watching the savings go down the drain after being hurt but it got to be interesting when finding ways to rebuild. |
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fireyone
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| Posted: Sat Feb 28, 2009 4:58 pm Post subject: |
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| Quote: | | if it's 5 bucks a week |
here is the $ 5 bucks per week maths.
if you shell out $5/week then it will be $ 20 per month
$20 * 12 = $ 240 per year.
but still i find this is not sufficient. one need to put some extra.. how about $ 10 per week?.  |
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amit
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| Posted: Sat Feb 28, 2009 5:13 pm Post subject: |
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I know that the current economy has definitely impacted the spending in my household. Especially where our vehicles are concerned.
When I was growing up my Dad worked on our cars, but my husband just doesn't have those skills or the patience to do that. So we haven't taken his car to a garage and it's problems just get worse and worse - and will continue to until it dies: I'm betting! - We have plans to get a new car, but it's just not in the cards right now and we should make his car hold out as long as possible!
So I think it's important to get your car fixed if you're in an accident! If you don't, you'll end up with an even bigger problem (no transportation!)
As for how I'd pay... I'd probably use a credit card [I know it would end up costing me more in the long run, but it would solve the immediate problem.]
Has anyone heard of the new company IDA? I've heard a little bit about it and it sound like they'll help you set up an account that is meant specifically to cover your auto insurance collision deductible.
I think that's a good idea for most people because a lot of people just don't have the discipline to save that kind of money - so if it were less liquid you'd leave it alone - and then you'd have it when you needed it.
So Ryan - it might be a little late, if you've already been in an accident, but it would be a good idea for next time. |
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AnnaRaC
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| Posted: Sat Feb 28, 2009 6:18 pm Post subject: |
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Greeryan,
This is a good question ... thanks for asking it!
With the economy in its current state, I have people asking about raising their deductibles or dropping physical damage coverage entirely. My response is, "It depends on your financial situation. Your deductible should be as high as you are comfortable paying if you have a claim, but not so high that it causes a hardship for you. If your car is damaged and you have to pay the first $500 to get it repaired, how would you pay it?" The way you phrased the question, and the responses in this forum, will give me some more things to suggest to them as food for thought to help them make the best decision for their own situation.
Thanks!
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ChristyP
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| Posted: Sat Feb 28, 2009 6:45 pm Post subject: |
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amit of course the more the better, i'm just saying that ANYONE and EVERYONE should be able to put back 5 bucks a week to start...that's 260 a year...and one of the absolute most frustrating things to me is this...people that really are in dire straights zero savings...barely getting by...then they get a giant income tax refund, and blow it  i've seen people (some are relatives) i know have nearly nothing, get back 4-5-6k from Uncle Sam, and it's gone within 30days new furniture, clothes, t.v.s, entertainment, etc...i'm not for a second advocating that you shouldn't treat yourself some, buy a new t.v. get some new clothes...but for pete's sake, why can't these people think to atleast put half of it in the bank and leave it alone!? I'll never as long as i live understand this...
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"Never, never be afraid to do what's right, especially if the well being of a person or animal is at stake. Society's punishments are small compared to the wounds we inflict on our soul when we look the other way." Martin Luther King Jr. |
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Lori
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| Posted: Sat Feb 28, 2009 7:34 pm Post subject: |
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| Quote: | Has anyone heard of the new company IDA? I've heard a little bit about it and it sound like they'll help you set up an account that is meant specifically to cover your deductible.
I think that's a good idea for most people because a lot of people just don't have the discipline to save that kind of money - so if it were less liquid you'd leave it alone - and then you'd have it when you needed it.
So Ryan - it might be a little late, if you've already been in an accident, but it would be a good idea for next time. |
I'm sorry gotta throw a giant bs flag up...I agree this is a great topic, but ryan is a rep for this 'new company' that anna has 'just heard about' | Quote: | | Dedicated Associate-Associate Contact Information-Ryan T Green |
I've just finished going thru the site, and I personally and professionally have many issues with this product as well as incorrect information given on the site...ie | Quote: | | For example, if you have a $1,000 collision insurance deductible, and you are involved in a collision that requires $5,000 worth of repairs to your vehicle, you would be required to pay $1,000 (your collision insurance deductible) before the insurance company will pay the remaining $4,000 to the repair shop. |
Can't even tell you how wrong and illegal that statement is in ALL states....no carrier can make an insured pay the deductible upfront...(might want to check the fair claims practice laws of each state)...the company will issue the 4k payment period...
and again same incorrect information | Quote: | | collision insurance pays for the repairs to the vehicle after the consumer pays their collision insurance deductible. |
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"Never, never be afraid to do what's right, especially if the well being of a person or animal is at stake. Society's punishments are small compared to the wounds we inflict on our soul when we look the other way." Martin Luther King Jr. |
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Lori
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| Posted: Sat Feb 28, 2009 9:40 pm Post subject: |
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Well I'm Glad to see that so many people have an interest in this subject.
I am a Marketing Director for IDA Marketing Services as Lori implies, but I did not post any links. I was interested to see how people would pay.
Now to set some things straight that Lori has said about IDA. This is posting was not supposed to be about IDA but I need to give correct information.
First off.. The Collision Deductible Reserve Plan or CDRP has been in the open market for over 5 1/2 years and has been approved by the insurance and securities regulators and all legal authorities in all 50 states.
Lori I'm not sure which site you looked at for your information but this is how the insurance collision deductible Reserve Plan works in a nutshell.
Step one... Raise your Collision Deductible to $1000...This will save you 10% - 40% on your insurance
Step two... Set up a CDRP and fund it with your savings, once the CDRP is funded you no longer contribute to the account. It stays there for when you need it. And you continue to pocket the savings from having a higher deductible.
Step three.. If you have an accident before you have the full $1000 IDA advances you the difference. You pay back the advance with no interest and no fees at a minimum of $25 a month.
Step four... When you retire from driving due to age, health, or similar situations IDA gives you back your $1000.
The Collision Deductible Reserve Plan(CDRP) acts much like a health savings account. You raise your deductibles and redirect your savings to an account that is dedicated to a specific purpose. The act of raising your deductibles from $250-$500 to $1000 will save you 10% - 40% on your overall premium.
In a health savings account(HSA) your money can only be used for medical expenses, With the CDRP your account can only be used for your collisions.
The advantage of the CDRP is that you can leverage your contributions to your CDRP to eliminate the risk involved having a higher deductible, that risk being a lump sum $1000 out of pocket. With the CDRP that deductible is spread out over time with no interest accrued. And even though many people are very smart and know that they can save money with a higher deductible yet they still have lower deductibles.
There are many reasons for this but one of the most common is that most lenders or lease companies will not allow you to have a deductible over $500. Over the last 9+ years of development and 5 1/2 years of product testing IDA has resolved this problem and without fail, to date all lenders and lease companies have allowed the customer to raise the deductible to a higher amount. The reason for this is that IDA now secures that deductible as a third party company. The fact is that most people do not have the discipline or the where with all to set up there own "reserve account" and not to tap into it. Plus the time it would take to raise a $1000 savings from the savings of a higher deductible would take a long time, and during that time they have an increased risk due to the fact that they do not have the full $1000 in their savings, where would the money come from should they have an accident? A credit card? a payday loan? All with high interest. With the CDRP those risks are not a factor anymore, because IDA will fund the entire $1000 interest free to cover the accident even if you only have $25 in your CDRP, no deductible out of the consumers pocket, and the advance is repaid over time from the savings that they realize from their higher deductibles.
Also all funds are FDIC insured, not to mention that several Leaders in the insurance industry are board member with IDA. These board members include Richard Hawkins Vice President of AAA Insurance of Washington and Idaho. Richard is well know in the insurance industry as a leader. Also Gerald McElroy is a member of the board of governors of Farmers Group Insurance and sits on the board of directors for Zurich Insurance as well. There are more than this as well.
When a client has a claim they take their car to the repair shop like usual and get the quote for the repair. The insurance company will pay the repair amount not including the deductible. IDA will send the funds to the repair shop to cover your deductible for you so that you do not have to come up with a lump sum out of pocket.
I don't know why you would have an objection to people saving money that they already spend on insurance and set up their own reserve account to pay for their deductible. Any financial adviser will tell you that raising your deductibles will save you money that you can use for better things.
If you have further questions Lori I will arrange a meeting with Gerald McElroy and/or Richard if you like or the CEO of IDA.
Again I was not intending that this thread was about IDA but I need to give correct information.
Ryan Green |
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greeryan
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