Why Bother With Full Coverage?
A Twitter listener asks why Dave recommends full-coverage auto insurance even when you have the cash to pay for repairs. Dave explains why it's worth it.
QUESTION: A Twitter listener asks why Dave recommends full-coverage auto insurance even when you have the cash to pay for repairs. Dave explains why it’s worth it.
ANSWER: It’s pretty simple. In some cases, it might not work. I have a buddy of mine who’s worth $20 million. He drives a $60,000 car. It’s paid for, of course. He carries coverage on that. That coverage costs him about $2,000 a year. Can he afford to write a $60,000 check if his car gets totaled? Yes and not blink. But the truth is at some point, some idiot’s going to come out of a side road and total his car. That wouldn’t be his fault. He wouldn’t need full coverage. That would be liability. But if it was an uninsured motorist it would. He’d have to fix the car. If he goes into a spin in the snow and totals the car, that’s $60,000. He paid $2,000 to get $60,000. It actually ends up working out. That’s why. Now if you’re broke, you absolutely have to have coverage, because you can’t afford to replace your freaking car. Don’t be saving money monthly by not having insurance on that kind of thing.