Car's value equals cost of annual insurance premium

[Whoever]

I've just realised that the secondhand value of my car is now only worth roughly the same amount as my annual comprehensive insurance premium. Is there any sense in continuing to have comprehensive insurance in such circumstances as if it were written off I'm unsure what sum I would receive in compensation? . If a wing gets bashed in, it would probably cost more to repair than the car is now worth, even though it's 8 years old, in good condition and a low mileage car.

[Panic Button]

My old car is similarly low in value, so last year I asked the broker if I would save money by dropping from fully comp to third party fire and theft.

He tapped away on the computer, and said it was �1 cheaper.

[kempie]

Bear in mind that fully comprehensive insurance also includes personal accident insurance and may cover medical expenses for passengers and loss of some personal effects.

[Whoever]

Panic Button - that is truly amazing. Just �1 difference? Can I ask who you are insured with? I'm wondering whether this is common across all insurance companies.

[Panic Button]

My broker has me insured with 'Broker Direct'

I think it is a trading name of one of the big boys.

[factor-fiction]

Covering the cost of damage to your own car is only one part of the insurance premium. In fact it's a fairly small part.

A major part is to cover the risk of damage to other vehicles and the cost of injuring others. Even the tiniest bump can cost several hundred pounds to repair and if someone gets injured the PI costs run into thousands- and for bad injuries can be hundreds of thousands. Premiums reflect this as this risk exists irrespective of whether your own car is worth �20000 or just a few hundred quid.

Hence third party cover is no longer a cheap option- the cost can be nearly as much as comprehensive cover.

The premiums also have to cover the cost of MIB levies to cover uninsured drivers.

Premiums do seem high but when you see the massive claims that can result from the tiniest bump (car damage, whiplash, time off work etc) you realise why.