Dave Ramsey's Car Insurance Philosophy

I've seen a lot of people mention Dave Ramsey on this site. Does anyone know Dave Ramsey's philosophy on car insurance? I listen to the radio show a few times a week but I don't have any of his books. One time I thought I heard him say to keep full coverage unless you have enough cash in the bank to pay for another car if you had to get one, like after an accident or something. We are trying to decide if we should have liability or full coverage. Did I hear him right?


Allison from Northeast TN

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January 18, 20080 found this helpful

I, too, watch his shows now that he is on DirecTV. I would like to know his answer to this also. Why don't you email the question to him at http://www.dave  dspMailDaveOnAir
so he could answer it on tv for everyone to see. I've never heard this question asked before.

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January 18, 20080 found this helpful

I already emailed him but I don't have 3 hours to listen to the show every single day so I don't know if he's answered it or not.

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January 19, 20080 found this helpful

I asked this question of some friends who listen to Dave Ramsey a lot and this was their response:


"from his forums they have his expanded baby steps list that he uses in his actual classes. It says:
1.3 Consider raising insurance deductibles to $500 or $1000 and dropping full coverage on paid for "bondo buggy" (You have an EF ya know)"

Hope this helps?
God Bless,
Sheila in Titusville, FL

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January 19, 20080 found this helpful

If you still owe money on the vehicle, you should keep full coverage on it and have the deductible at whatever amount you can afford. If it is paid for, the coverage should depend on the value of the vehicle. As another post mentioned, if the vehicle is only worth a few hundred or 1-2 thousand dollars, there is no sense in spending the money on full coverage.


If it is a newer car with low mileage and it's paid for, then by all means, you want to have full coverage. For example, I have a '94 with 142k miles on it. It's only worth about $1200. I have liability only with a $500 deductible. You can find out the value of your vehicle at, which is what most car dealers use as a reference.

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October 19, 20120 found this helpful

I have been a facilitator for Dave Ramsey's FPU class for years. He says that unless you have the cash to replace the car then get full coverage on it. And even though he has the cash to replace a car, he personally carries full coverage on his cars because it's such a good deal. Not that much difference between basic liability and full coverage for most folks.

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Consumer Advice Cars InsuranceJanuary 18, 2008
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