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I'm probably just not getting the majority veiw here. From what I gather, the belief is just go with liability and pay out of pocket to fix your \$5000 car.

Consider this scenario (as it falls strictly into the context of my orginal post): You have a car valued at \$5000 according to bbk.com. You have \$5000 in the bank. A tree falls on your car and totals it. The insurance company pays out \$3000. You now have \$8000 in the bank. You buy another car for \$5000, leaving \$3000 in the bank. The insurance premium of \$750 is coincidentally due, which is now \$900 because of your recent claim. You now have \$2100 in the bank. \$1200 in rent is due. You now have \$900 in the bank. Three days later your company suddenly lays you off. Your CPA sends the \$500 income tax service bill. \$900 in other bills are knocking at the door. Unemployment insurance is paying \$2000/mo. You're barely surviving until you find a job. Also, you're wife's birthday is one week away.

To recap:
\$5000 - to start
+ \$3000 - insurance claim
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= \$8000
- \$900 - new insurance premium due
- \$1200 - rent due
----------
= \$900
(\$1400 in additional bills are due)

Now consider my scenario: Pay the full coverage until you have something close to the value of the car plus your nest egg in the bank.

After paying \$1400 in bills, you have \$3600 left. Add this to your \$2000/mo unemployment insurance for four months of job looking and you have \$2900/mo. This is implying that in one year, \$5000 can be saved and added to the top of the current nest egg.

Brett

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