Insurance Claim

[Roger M. Woodbury]

Some thoughts.

First of all, you have a 19eighty-SEVEN 4000 Quattro?  Hemmings CPI Guide
gives that vehicle in "good" condition, a value of $2450.  If you are
carrying collision insurance on your car, you likely have at least a $100
deductible, and the collision insurance may well cost more than ten percent
of the value of the car annually, and perhaps more.  That's quite a lot of
money to spend protecting a car worth, in reality, not a whole lot to begin
with.

Now having said that, assuming that you DO have collision insurance, AND the
amount of damage is over and above your deductible, making a claim will
increase the cost of physical damage insurance for you for the next three
years.  In Maine (where I am), it works out to 30%.

If I were in your shoes, I would make the claim, and get the car fixed,
assuming that you plan to keep the car for at least three more years.

As soon as I had the insurance claim check, I would drop the collision
insurance off the car.

The reason that I would do that is that the car will steadily decrease in
value, while the insurance premiums will likely stay level or even increase
slightly.  It makes little economic sense to insure the car given its value,
and the relative cost of the physical damage insurance.

Having spent a long time in the insurance business, the best advice that I
used to give my clients regarding property insurance in general, was to
accept the highest deductible possible to pay out of petty cash.  For most
of my clients (which were business clients), property generally was insured
with a $5000 deductible.  Private passenger autos not less than $1000 for
collision and comprehensive until the vehicle depreciated to between $5000
and $10,000, and then the car was self-insured.

In my house now, collision insurance will be dropped when the vehicle's
value is below $5000, and comprehensive insurance is carried with a
deductible of not less than $500.  Yep, that means that if I break a
windshield, I have to pay for it, but so far, I have not replaced a
windshield since 1994, so I figure that I am two and two thirds windshields
ahead of the game.  (Here in snow country, where they "sand" the roads with
ball bearings, the secret is to slow down, and increase the distance between
you and the idiot in the SUV in front.).

If you make a claim for this small amount of damage, the claim, plus the
last one will ride in your insurance history in the Great Insurance Industry
in the sky.  The memory in that sucker, I understand (from 60 Minutes and
other places), is FIVE years.  It seems to me that given the age of your
car, and the actual value of it on the market, that the insurance is best
saved for the accident or damage that renders the car unusable.  Cosmetic
refurbishing is up to you.

Roger

(sanely left  the insurance biz twelve, count 'em, TWELVE years ago.)