car insurance

[desh]

It's time for me to renew my car insurance. Progressive, my current company, can renew my coverage for $705 for the next 6 months. Which is rather good.

The thing is, Pennsylvania has a "limited tort" option, which I'm not currently using. Essentially, you sign something waiving your right to sue in case of an accident. You have to bend over and take whatever the insurance offers you, with no recourse. (Unless you die or are dismembered or something.) Though you get a substantial discount for doing limited tort. The premium with limited tort?

$487 for 6 months. This is absolutely unheard-of for a male driver under the age of 25 in Philadelphia. I thought I'd be lucky to get under $2000 for a year. $1000 is amazing.

But I kind of like my right to sue. So I'm not sure.

Advice?

Comments

[bubba.livejournal.com]

You may never end up needing to sue, but if the time comes, I know *I'd* want the ability to do so. Spend a couple hundred more bucks (I mean, really, you're already getting a killer deal anyway) and go with the Progressive/$705.

*nod*

[arie]

Yeah. that's my opinion too. It's one of those things you'll never miss as long as you never need it, but that one time where you're really, really unlucky and you want it you'll totally be kicking yourself that you signed away your right to sue. Sure the odds are pretty in your favor you'll never miss or need it, but is it worth it for that one time you may want or need it?

[captainjew.livejournal.com]

Geico

[desh]

The caveman commercial was so awesome that it's almost worth the extra $400 it would cost!

[dishpanwaterr.livejournal.com]

you may think you're never going to need to sue but you never know what could happen. had i had limited tort on my insurance, i would not have $20,000 maturing in the bank right now.

[desh]

Yeah, you know, I keep thinking of you whenever this comes up.

[ferrell.livejournal.com]

Considering the problems I'm having with my health insurance provider, I'd have to say there's no way I'd ever waive my right to sue an insurance company.

[dorchadas]

IANAL, but as far as I know you can never actually waive your right to sue. A statement that you've done so, however, makes it much less likely you'll win, so it might amount to about the same thing.

[desh]

The whole "limited tort" thing is a Pennsylvania state law. The car insurance industry is highly regulated, and among other things, they're required to give us a limited tort quote along with any standard tort quote, whether we want one or not. So I find it really likely that the waiver is legally binding.

IANALBIPOOTV.

[bumonyou.livejournal.com]

Again, love the icon, and really? I think you might be arguing that you can't waive your right to sue just like I can't waive my "right" to sodomize a chicken. Oh sure, I'll SAY I won't do it, I'll even sign my name to it, but no flimsy piece of paper is gonna stop me goddamit! So umm...basically I am calling your argument silly. And I just made mine with a chicken-sodomizing argument. You gonna take that?

[bumonyou.livejournal.com]

It has come to my attention that my previous comment may have implied that I enjoy the carnal company of fowl. This is not the case. I just like to shoot my mouth off.

[desh]

Of course you don't enjoy the carnal company of fowl. You're in NZ. That's what sheep are for.

[nuqotw.livejournal.com]

You save $218 dollars with limited tort.

Let's estimate the probability p that you want to sue at 1/10000. Let's imagine the insurance company will give you $0, and that in a lawsuit you could take away $500,000. (I made up the numbers)

Expensive insurance: Your loss by not being able to sue is 1/10000 * 500,000 = 50. You gained $50 by preserving the right to sue, but paid $218 for that right. You lost $168.

Cheap insurance: Your expected gain is $218, the amount you saved.

In general, you would have to win $218/p + $218 to make the expensive insurance worth it. Be cheap!

[desh]

But doesn't my risk aversion play into this? It's really an economics problem, not a purely mathematical one. I'm not running this scenario a number of times that approaches infinity; probably fewer than 4. (After which, I'll possibly either have enough money that I won't care much, or I'll be doing Philly Car Share, or both.)

[pkzimmer.livejournal.com]

I do the limited. Don't have the cash, and you CAN sue for bodily injury. What you CAN'T do is sue for "pain and suffering". So basically you can sue for your hospital bills and for lost time at work etc. etc. You can't sue for psychological damage unless you get in a serious accident.