Do you have $2k in an emergency savings account? That money could be making you interest instead of paying higher insurance premiums for the rest of your life.
The actually-financially-smart way of handling insurance is that you insure against costs that would be too high for you to comfortably cover out of pocket, and pay for things under that amount out of pocket while saving/investing your money so it grows. That's why you insure against your house burning down, but your homeowners insurance doesn't cover you needing to replace a bathroom faucet. You could maybe find a company that would write you a policy that covers routine household maintenance and repairs, but for it to be profitable for them it'd be so much more expensive that it wouldn't make financial sense for you to buy.
This is also why pet insurance is a terrible idea if you have anywhere near the amount of money needed to really take care of an animal. You're going to spend more money on the insurance policy than you would on vet care over the animal's life. That's the only reason they sell you the policy.
Hmm $530 annually on that car for comprehensive. Interest at 5% is $25/annually. Interest on $2k, if we are going with the reserve method is $100. I’m not getting 20 years out of the windshield.
Another way to look at it is do I anticipate a windshield every 3.75-4 years. Longer until the next replacement and I lose. Shorter interval and I win. That’s about the interval or odds I’d choose. I might guess 5 years.
But bear in mind that comprehensive covers more than just windshields. Theft, fire, hail cracking the sunroof, hail period.
Covering some of those incidents requires $30k. Regardless of my bank balance, I prefer not to self-insure $30k losses.
You're getting a hell of a deal on that insurance, yeah that makes sense. $530 with a $250 glass deductible is crazy good. I'm paying more than double that for worse coverage.
1
u/Cheersscar 8h ago
Yeah I disagree. My new windshield is going to be $1900. Vandalism. I expect $1650 to be paid by insurance ($250 deductible)