Tuesday, April 30, 2013, AM | 2 Comments
Car insurance is a necessary expense, but you don’t have to shell out top dollar to get good coverage. For the most part, all insurers are strong enough to pay a claim if the need arises. However, many agents tack on riders that make it seem like the insurer is desperate for money. All this does is raise your bill – unnecessarily.
Are you paying too much for car insurance? Maybe, if:
You Haven’t Consolidated Coverage Yet
Do you have your homeowner’s insurance with one company, your car insurance with another, and a separate liability policy with yet another? If so, you may want to take a look at consolidating coverages. Some people hold out with their current agents because they like them. That’s fine – if you like your insurance agent, take him out for drinks. Then, switch insurance carriers.
Don’t confuse a likeable personality with good insurance coverage. Just because the agent is nice doesn’t mean the insurance coverage gets any better. The truth is that the agent has little to no control over the claims process. He’s just the seller who collects commissions on the policy he sold you.
If there’s ever a problem, his hands are tied. So, make friend with your agent if you like him – just don’t marry the insurer he represents unless they really are the best game in town.
You’ve Still Got Full Coverage on an Old Car
If your collision and comprehensive coverage is more than 10 percent of your vehicle’s salvage value, consider dropping the full coverage. If you’re ever in an accident, the insurer will likely total the vehicle instead of fixing it. To them, it’s worth more in a junk yard. It seems weird that they would ever do this, when a car could be fixed – especially if it’s just 5 years old. However, 5 years is a long time in “car years.”
Insurers don’t have an attachment to your vehicle, even if you do. It’s all about the money. If it’s not worth replacing the door skin, or the front bumper, they’ll just cut you a check for a new car – meaning that you’re throwing money out the window by paying for the additional coverage. You’d be better off canceling the coverage and putting the difference in your savings account. It could be substantial, and you could make the call as to whether to fix it or send it to the junk yard if anything ever does happen to it.
Your Deductibles Are Too Low
It’s not uncommon for people to keep their deductibles at $0 or $200. However, think about whether this really makes any sense. If you are saving any money at all, it probably doesn’t. In other words, if you set your deductible at $1,000, and you had $1,000 in your savings account, then you wouldn’t need to worry about meeting the deductible. Sure you would have to spend the savings if you got into an accident.
However, if you’re a relatively safe driver, the odds of this happening often are slim. In fact, odds are you’ll be able to replace that $1,000 before you’re in another accident, and then some. That’s money that’s going into your pocket – not the insurer’s.
Gillian Kearney is an insurance consultant. Her articles mainly appear on automotive and insurance blogs. Visit the Monkey website for more ideas.