High Deductible Car Insurance and Emergency Funds
Early one recent Monday morning, I was on my way to work. The sun had not come up yet (it was only 6:30am at the time), and I was a mile or two from the house in my recently purchased Toyota Corolla. It was three days before Thanksgiving, and I was thinking about the upcoming time off with family.
WHAM!!!
“What the hell was that?” I shouted aloud to myself. It sounded like someone had thrown a huge rock at the side of my car. I pulled over to the side of the road and got out of my car to see what had happened. I had to force the door for it to open – the side of my car was completely smashed in! What the hell had just happened?!? I didn’t see that I hit anything.
High Deductible Car Insurance and Emergency Funds – Dead Deer, Smashed Corolla
I got back in the car and turned around. That’s when I saw a huge dead buck in the middle of the road, and I realized exactly what had happened. Apparently a deer decided to run across the road and slam head first into the side of my car! If I had been half a second later it would have smashed into my front windshield, and I might not be around to write this post 🙂
I proceeded to call the accident into the police and insurance company, and I made my way into work about 45 minutes late.
High Deductible Car Insurance and Emergency Funds – Car Repair Costs
I received the estimate for the repairs a couple days after dropping the car off at the shop (Thanksgiving caused a bit of delay). The repair total was $2,710!!! Thank god my wife talked me into going with a reasonable car insurance deductible of $250 vs. the $1,000 I was considering.
For all of you readers that may be considering high deductible car insurance, please use me as an example. High deductible car insurance really is NOT worth it 🙂 Through absolutely no fault of my own, a crazy deer could have instantly caused me to hand over $1,000 to the insurance company if I would have gone with the higher deductible amount!!!
This situation also highlighted for me why it is so important to have an emergency cash fund. Crazy expenses can and do come out of nowhere sometimes 🙂
High Deductible Car Insurance and Emergency Funds – What About the Cracked Windshield?
After looking over the estimate, I noticed one funny thing. The estimator was showing that the crack in my windshield was a “pre-existing condition.” What the hell?
I got him on the phone and explained the situation, and he was not very cooperative. I asked to escalate it to his manager – she gave me a call later that day. She wouldn’t budge either. “Look, I’m not trying to scam anyone here. The deer caused the windshield to crack like four feet across,” I said as I asked to speak with her supervisor. Well, once I got a call from the boss’ boss, we got it all straightened out and Progressive agreed to pay for the cracked windshield.
This is a great example of not bending to the will of the insurance companies – about 10 minutes of negotiation total saved me about $300. That’s $1,800 per hour saved 🙂 They should have paid for the damages to return the car to pre-crash stages, and I’m glad Progressive finally agreed to do the right thing.
High Deductible Car Insurance and Emergency Funds – Final Thoughts
I hope that you take three things away from my personal story:
- Please make sure you aren’t driving with high deductible car insurance – it is NOT worth it in the long run!
- If you don’t have friends or family that you can borrow a car from for a while, you should foot for the rental car insurance help unless you have a sizable emergency fund. It’s taking the repair shop 17 days total to fix my car – that’s a huge rental car bill!!!
- Please make sure you set aside some small amount of money as an emergency fund for that couple hundred dollar actual emergency that can come from out of nowhere!
Here are some pics of the damage below.
Close-up side view of car where deer hit me – smashed in the door and broke off the handle. If you look close you can see the deer hair.
Side view of car where deer hit me. Rear drivers door is smashed up pretty bad as well.
View of huge windshield crack
Oh my gosh that’s crazy! I’m not sure if it’s more crazy that the deer came out of nowhere and ran into the side of your car or that the repair shop is taking 17 days to fix it!!
Dee @ Color Me Frugal recently posted…Passive Income/Side Hustle Update: November 2013
Yeah – I never in 100 years would have expected a deer to smash into the side of my car… They say that 60% of all deer accidents happen in the month of November though. I guess I just added to the statistic 🙂
On the 17 days, I didn’t really put up much of a fuss since I have alternate transportation (although I’m getting less mpg driving my wife’s van).
Thanks for stopping by Dee 🙂
Wow, that’s crazy that an animal would run right into the side of a vehicle….people always talk about how smart animals are. Apparently they’re not good judges of the speed of moving object, huh? Glad to hear you weren’t hurt – and as far as the insurance goes, it only takes one of these accidents to offset the savings of high deductible insurance for a very long time. I had mine a few years ago when I wasn’t paying as close attention as I should, and a lady who just got her driver’s license for the first time (at age 42) thought that when turning into her driveway it would be a good idea to come to a complete stop first…..wait……and then proceed to turn enter her driveway. I messed up the front end of my car pretty good.
Brock @cleverdude recently posted…Clever Dude reviews the 2014 Kia Forte LX
Brock,
Thanks for stopping by. As you pointed out, I’m pretty much convinced that high deductible car insurance is the devil in disguise!!! If I had high deductible insurance I wouldn’t feel as bad if the accident were my fault. But, having a deer ram into the side of your car is some kind of freak of nature – it would seriously suck to have a $1,000 deductible right now 🙂
Some people make some of the weirdest driving decisions. It sounds like your 42 year old lady is one of them. Crazy!
Talk about lessons learned. Had the low deductible on my SUV for 8 years, no accidents. Went with the high deductible and less than a month later: snow storm, accident, there went $1000 bucks!
Glad to hear that you weren’t injured, which is certainly the most important thing. We actually have a high deductible ($1000) on our car insurance. Of course, I have the emergency fund to cover that amount if needed. My husband works in the insurance industry and one thing that he always emphasizes are that companies like Progressive and Geico will promise to save you “15% or more” but it really comes at an expense. One expense is the hassle you had with the windshield. In his experience, that type of situation is pretty much their method of operation. They made it difficult for you in the hopes that you wouldn’t escalate the discussion to the level you did. A certain percentage of customers will not do what you did and they will profit from that. Another expense (to you) is that you may have a low collision deductible but may not have adequate liability coverage. This means that if you are in an accident where someone else is injured, you may not have the coverage needed to pay the other person’s claim.
I mention this because it is important to make sure you have the coverage that you need or that you are covered in the way you assume you are when you purchase insurance. You may be saving on your monthly bill, but when you actually need to use the insurance you might find that your policy is lacking. And that wouldn’t be good at all from a financial perspective.
Green Money Stream recently posted…Retirement Planning: Overcoming Common 401K Plan Hurdles
GMS,
Thanks for stopping by and commenting – the points you raise here are great!
You’re spot on with the discount insurers like Progressive and Geico. I have come to the simple conclusion that all insurance companies are the spawn of Satan. I knew going in that they would be a real bitch to deal with, so I came very prepared to get screwed. I think it was this mentality that allowed me to get fairly compensated for my loss. Most folks that don’t take on this perspective will get the short end of the stick.
Thanks for the educated perspective 🙂 I love your blog btw.
Good thing you were not hurt. I currently have a $0 deductible because my car is old and I ain’t trying to pay the insurance company 25% of what the car is worth or more in case of something. Emergency fund is one of the best thing that ever happened to me. I always feel at peace because I have a small EF set aside.
Demaish @ Borrowed Cents recently posted…Ways in which winter weather can really break the bank
Demaish,
Thanks for stopping by! I’m very thankful it was not worse 🙂 I looked at the zero deductible option, but I’d have to have a claim less than every two years to make extra payment worth it. I figured I could go 4+ years without a claim on the average just based on my past 17 years of driving history.
And yes, having a decent EF is very liberating 🙂
Deductibles help lower premium as well as helps to lower submitting the amount of claims. But not all deductibles are equal.
So here is a thought, get a quote with a high deductible for your collision and a lower deductible for your collision and see what the difference in your rate is, and then do the same for your comprehensive coverage. My bet is that you will be surprised at how little your premium goes up in relation to you having to pay significantly more if there is a claim.
Worli recently posted…Manage Your Finances and Investments
Worli,
Thanks for stopping by! This is exactly what I did – I determined that for me it wasn’t really a good idea to get a super high premium because I’d have to go more than 7 years without a claim. Pretty unlikely 🙂
As you mentioned, I’d recommend that every one run the number for their own situation. I’d be surprised if a high deductible will really save them money in the long run 🙂