Insurance is like gambling. You spend some money, in the hope of making much more in return. In the case of insurance, you pay a premium to cover yourself against a potentially greater loss. If you don’t make a claim, you effectively lose your premium; but you do get peace of mind in return. If you do make a claim, then you effectively just won the bet.
Insurance companies are expert number crunchers. They would have taken into consideration all the risk factors and probability figures, such as the chances of you having an accident and the average damage per accident, when deriving your premium amount. Like any casinos, insurance companies are out to make a profit. Therefore, on average, you can expect to make a loss.
Getting a third party insurance cover is a no brainer. If you are somehow unlucky enough to crash into a Lamborghini, at least you won’t have to spend the next 20 years paying it off. That’s like winning the jackpot. The chances are miniscule, but the return is thousand folds.
On the other hand, a comprehensive car insurance cover is more a grey area. Depending on the value of your car, you could potentially be better off saving the money in the bank. In the unlikely event of an accident, hopefully your savings in premium over the years is enough to cover the damages. However, the repair bill could easily run up to thousands of dollars. Can you afford to completely write off your car in the event of a more serious crash? The additional peace of mind may just be worth the extra premium to upgrade to a comprehensive cover.
Custom modifications to the car is going to increase the premium. Keep that in mind if you’re looking to buy a car.