Automotive

I made a spreadsheet for figuring out whether collision insurance is worth it

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  • Jul 13th, 2016 5:56 pm
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[OP]
Jr. Member
Sep 4, 2007
121 posts
19 upvotes

I made a spreadsheet for figuring out whether collision insurance is worth it

For finance nerds only.. Make a copy, fill in your insurance coverage cost, your city's road safety stats, and your assumptions about your driving, and see the impact on the outcome.

My own car insurance renewal is coming up and I wanted to make a rational decision regarding whether to include "collision" insurance (for at-fault) in my coverage. It was a lot more difficult than I thought to analyze my personal considerations for this decisions (for example, I don't like haggling with insurance companies over cost of repairs nor do I trust them to be honest, I'm a good driver, I could afford repairs if needed, but I live in a city where people apparently don't know how to drive).

So I quantified all of the major factors that I could think of when making this decision, and stuck them into a spreadsheet. I'm curious as to whether others can poke holes in my reasoning.

https://docs.google.com/spreadsheets/d/ ... =655873618
13 replies
Deal Expert
Aug 22, 2011
34453 posts
20479 upvotes
Center of Universe
For my 15yr old summer car, it was less than $100 more for full coverage.
Thanks for the spreadsheet though.
Deal Addict
Jan 23, 2006
1636 posts
196 upvotes
Toronto
Your deductible is too high; I have $500 deductable coverage on a regular policy and I don't pay extra for accident forgiveness; and last year after accident on a new car insurance company cut a check for $30,000;
I think in GTA it's worth it to have a good car to drive as insurance is high anyways so why drive a beater; also there is higher chance to get into accident due to higher population ratio.
Deal Addict
Aug 20, 2007
1910 posts
683 upvotes
Kitchener
I wouldn't consider accident forgiveness as part of the cost of collision. Whether you insure your car for collision or not, you should buy the accident forgiveness endorsement in case you are at fault. Whether the insurance company pays for your damage or not, your rating will be impacted. Some caveats to that based on June 1, 2016 reforms but overall accident forgiveness isn't the same as declining collision.
[OP]
Jr. Member
Sep 4, 2007
121 posts
19 upvotes
peelhic wrote: I wouldn't consider accident forgiveness as part of the cost of collision. Whether you insure your car for collision or not, you should buy the accident forgiveness endorsement in case you are at fault. Whether the insurance company pays for your damage or not, your rating will be impacted. Some caveats to that based on June 1, 2016 reforms but overall accident forgiveness isn't the same as declining collision.
I didn't think of it this way since it seems insane that if I don't have collision coverage and I'm at fault, my insurance would go up. But I guess I was only thinking of non-liability or property damage accidents (if only my car is damaged and I'm not asking insurance to pay, they have no business increasing my coverage). But this makes sense thanks for pointing it out.
Deal Addict
Aug 20, 2007
1910 posts
683 upvotes
Kitchener
nadita wrote: I didn't think of it this way since it seems insane that if I don't have collision coverage and I'm at fault, my insurance would go up. But I guess I was only thinking of non-liability or property damage accidents (if only my car is damaged and I'm not asking insurance to pay, they have no business increasing my coverage). But this makes sense thanks for pointing it out.
For most drivers with more than 6-8 years of experience, collision and comp are fairly small amount relative to the amount for mandatory coverages, ie Liability, AB, DCPD, etc. Personally, I would never recommend not having collision on your car unless its worth less than 1000-1500. Even then if your car is worth that little your probably going to be paying around $100-150 bucks a year for collision.
Deal Fanatic
Aug 15, 2015
8481 posts
4809 upvotes
ON
indca wrote: Your deductible is too high; I have $500 deductable coverage on a regular policy and I don't pay extra for accident forgiveness; and last year after accident on a new car insurance company cut a check for $30,000;
I think in GTA it's worth it to have a good car to drive as insurance is high anyways so why drive a beater; also there is higher chance to get into accident due to higher population ratio.
Worth it and affordable do not always end up on the same side of the scale.
For the same reason(high chance of accidents), it is not worth to have a "good" car to drive as you will have more to lose financially if an accident were to happen. The insurance company will give you a harder time negotiating a settlement for a car worth 50,000 than for one worth 5,000 , not to mention the fact that they might not write it off and you end up taking a hit on the value of the car for the accident and will never recuperate that money.
I can't understand your logic behind your statement, at least the financial aspect of it.
[OP]
Jr. Member
Sep 4, 2007
121 posts
19 upvotes
peelhic wrote: For most drivers with more than 6-8 years of experience, collision and comp are fairly small amount relative to the amount for mandatory coverages, ie Liability, AB, DCPD, etc. Personally, I would never recommend not having collision on your car unless its worth less than 1000-1500. Even then if your car is worth that little your probably going to be paying around $100-150 bucks a year for collision.
I don't see that being true for everybody. I have 10 years of exp / no claims or anything bad on my record - my collision coverage is at 300$ a month.
Banned
Jan 23, 2016
1430 posts
405 upvotes
Kitchener, ON
It depends alot on the car's safety ratings. My sunfire was 200/month just liability. My vibe was 150/month full coverage with 300 deductible.
Deal Addict
Aug 20, 2007
1910 posts
683 upvotes
Kitchener
nadita wrote: I don't see that being true for everybody. I have 10 years of exp / no claims or anything bad on my record - my collision coverage is at 300$ a month.
If your collision coverage alone is $300 a month, your overall vehicle premium would probably be in excess of 1k a month. Or are you quoting your overall monthly premium which is not just collision but a number of other coverages?
Deal Addict
Nov 2, 2014
1053 posts
394 upvotes
Scarborough, ON
nadita wrote: For finance nerds only.. Make a copy, fill in your insurance coverage cost, your city's road safety stats, and your assumptions about your driving, and see the impact on the outcome.

My own car insurance renewal is coming up and I wanted to make a rational decision regarding whether to include "collision" insurance (for at-fault) in my coverage. It was a lot more difficult than I thought to analyze my personal considerations for this decisions (for example, I don't like haggling with insurance companies over cost of repairs nor do I trust them to be honest, I'm a good driver, I could afford repairs if needed, but I live in a city where people apparently don't know how to drive).

So I quantified all of the major factors that I could think of when making this decision, and stuck them into a spreadsheet. I'm curious as to whether others can poke holes in my reasoning.

https://docs.google.com/spreadsheets/d/ ... =655873618
Did you factor in Hit and Runs?
Deal Fanatic
User avatar
Aug 11, 2008
8756 posts
1377 upvotes
Ontario
Hit & Runs also fall under the collision portion of your policy, without this coverage, you will not be covered for any hit & run accidents
nadita wrote: For finance nerds only.. Make a copy, fill in your insurance coverage cost, your city's road safety stats, and your assumptions about your driving, and see the impact on the outcome.

My own car insurance renewal is coming up and I wanted to make a rational decision regarding whether to include "collision" insurance (for at-fault) in my coverage. It was a lot more difficult than I thought to analyze my personal considerations for this decisions (for example, I don't like haggling with insurance companies over cost of repairs nor do I trust them to be honest, I'm a good driver, I could afford repairs if needed, but I live in a city where people apparently don't know how to drive).

So I quantified all of the major factors that I could think of when making this decision, and stuck them into a spreadsheet. I'm curious as to whether others can poke holes in my reasoning.

https://docs.google.com/spreadsheets/d/ ... =655873618
RIBO LICENCED INSURANCE BROKER, over 35 years experience
[OP]
Jr. Member
Sep 4, 2007
121 posts
19 upvotes
RobertSmalls008 wrote: Did you factor in Hit and Runs?
I honestly don't understand the hit-and-run scenario in Ontario, and I'm reading lots of mixed messages on the topic. First of all if you file a police report within 24hrs, I understand it shouldn't be counted as an "at-fault". If you're not at fault then shouldn't this fall under "Uninsured motorists" coverage? (http://easywayinsurance.ca/documents/Au ... e_FAQs.pdf)

Either way, my model accounts for that under "number of collisions in your city / number of registered vehicles". Number of collisions usually includes hit and runs. If you want to be more precise, you can pull the exact hit and run numbers from the broader Ontario report (http://www.mto.gov.on.ca/english/public ... t-2013.pdf), or find one for your city.
Deal Addict
Aug 20, 2007
1910 posts
683 upvotes
Kitchener
nadita wrote: I honestly don't understand the hit-and-run scenario in Ontario, and I'm reading lots of mixed messages on the topic. First of all if you file a police report within 24hrs, I understand it shouldn't be counted as an "at-fault". If you're not at fault then shouldn't this fall under "Uninsured motorists" coverage? (http://easywayinsurance.ca/documents/Au ... e_FAQs.pdf)

Either way, my model accounts for that under "number of collisions in your city / number of registered vehicles". Number of collisions usually includes hit and runs. If you want to be more precise, you can pull the exact hit and run numbers from the broader Ontario report (http://www.mto.gov.on.ca/english/public ... t-2013.pdf), or find one for your city.
Hit and Runs in Ontario are considered not at fault but the coverage for your damage comes from your collision coverage. Uninsured motorist coverage is when the there is a third party that has no insurance. IN the case of the a hit and run, while there is a third party you don't know who it is. If that person ends up being found then it would convert to either a DCPD claim, ie if they have insurance, or Uninsured if they are truly uninsured. The reason Hit and Runs are paid out of collision is to reduce the incentive for people to lie since they are still responsible for the collision deductible when there is a hit and run. Only if and when the other party is found will your deductible be paid back to you.

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