Quote:
Originally Posted by pmax
When is the replacement differential significant then?
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My math would again be based upon probability.
In my business life the responsibility for determining risk and probability is handled by the Insurance Company actuarial analysis. Data bases are filled with limitless historical information which allow for reliable risk modeling. (Haggerty has the same information; I never pressed a broker for loss runs to support their premiums.)
Here it could be handled by understanding premium differential.
The probability of loss is the same in all scenarios whether the car is insured for $40,000, $80,000 or two dollars..... the risk or exposure to loss given the same use is the same. So value does not effect risk.
The question then moves to
significance.... How much would it financially hurt to lose your 911 and then replace it?
If
not at all, you might think the replacement differential is insignificant..... I would venture equally you would think the increased premium is also insignificant. Thus $400 of insurance is a small number to pay for the assurance of comparable replacement.
If total loss
is significant, the increased $400 would be mandatory for a responsible adult.
Bottom line no matter the significance; Having proper coverage is the sound decision.
Quote:
Originally Posted by Reno775
Insure for what makes you feel comfortable in the case of a total loss. Everyone’s threshold for risk is different.
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I agree with this; life is to enjoy....