Insurance is part of your financial security. Think about what kind of setback you would have if your car is wrecked in an accident, you don’t have the proper coverage, and you need to replace the car. Do you have enough funds set aside in an emergency fund? This is what is referred to as self-insuring. Only when you have the cash to replace the car would an honest, trust-worthy insurance professional recommend that you not carry insurance.
Not having the proper coverage on your car is one of the most common mistakes people make when they try to purchase coverage online, or over the phone. Many customer service representatives that you speak with are not educated regarding the insurance laws in your particular state.
Independent insurance agents represent the insurance companies that they do business with, but they do not work for those companies. Direct writers of insurance are employees of the company, and collect their paychecks from the insurance company. Examples of these direct writers would be State Farm, Allstate, or Geico.
When you purchase insurance from an independent agent, that agent has the ability to review your policy periodically, and shop it if there is a premium increase or a coverage change. This practice saves you time and money. There are a few questions that you should ask any agent when you are reviewing your policy, and perhaps looking for a new insurance company to protect you.
Here is a brief list:
* Liability coverage
My policy has $300,000 limit of liability, and in today’s world, that much money wouldn’t go very far if I was being sued. What is the difference in premium if we look at increasing that limit to $500,000 or even $1,000,000? (You will find typically it is not that much to increase.)
* Physical Damage
What does comprehensive cover? What does collision cover? Is there much of a difference in premium to assume more risk and increase my deductibles? (Be sure to put your deductible amount in your emergency fund!)
Is there emergency roadside assistance on my policy? Is there any coverage for glass breakage? What happens if I go on vacation and have to rent a car; does this policy cover that car, too? (This last point is very important as every insurance company handles this differently.)
Armed with a little new information on purchasing car insurance will hopefully give you peace of mind when making decisions that affect your financial security.