Is it worth getting full car insurance on a used car?

old carMy husband was washing the dishes last week, and something bad always happens when he does housework. The cops knocked on the door and asked him to come with them. It turns out that a Jeep had lost control going down the street and rammed ours into a parking sign, crushing it from both sides. Nobody was injured, but the other car lost a wheel and a neighbor called the police.

That was a lucky thing for us, because we only had basic liability on our car, which was a 1995 Subaru Legacy wagon. I had not realized this, because my husband takes care of the car (this is not a gender thing, necessarily, but more because he bought the car on his own before we got married and I rarely drive it). If the other driver had vanished, we would not have been covered at all and would have had to take a loss on the car.

My husband made his choice about the insurance coverage because he did not think the value of the car, especially as the years ticked by, merited the extra payments for comprehensive and collision, which would have covered us for theft, fire, vandalism and accidents. But I was curious to see the actual numbers, and to figure out what we should do on our replacement car, which would be worth a little more at the start.

What's the actual price difference?
It turns out that the difference between general liability and full coverage is about $60 a month, or $720 for the year. We owned that car for five years, which means we would have paid $3,600, or almost exactly what we got as a payout for our car, plus replacement car seats. So if the other car had run off, we could have broken even.

On our new car, the difference in payments is about the same $60, and my husband and I have come to the conclusion to go with full coverage, at least at first. I am a big pessimist when it comes to cars. My first car was destroyed in the great state of Texas by a drunk, uninsured driver in a pick-up truck -- I was hit head-on -- and I was lucky to have had full coverage that paid out for my medical bills and lost pay from an extended absence. My replacement car was pummeled for an hour with baseball-sized hail about a month after I brought it home from the lot, requiring more than $1,500 in repair work. I gave up on cars after that (which is the real reason my husband handles all the details).

The Brooklyn neighborhood where we currently live is hard on cars. We had two break-ins with smashed windows, various dings while parked, and the total loss. There's rarely hail, but lots of snow, ice, rain, dirt and potholes. The chances of something happening to our new used car are pretty good, I think (I hope Geico isn't listening), so my gut is telling me that shelling out a few extra bucks a month will be worth it to us, even if we never file a claim for some of our smaller mishaps.
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