Russ on the Radio! Russ was a guest speaker on KSCO “money moves” talk show last Thursday, May 12.
5. Choosing a policy that is inconvenient or an agent or company that is hard to communicate with. You should choose a policy that “clicks” with you. Choose the coverages that are important to you. Options like towing and road service, auto medical, rental car reimbursement, and original manufacturer replacement parts are all convenient coverages, but can be redundant (if you have health insurance, you might not need auto medical, if you have membership in an auto road club, you might not need towing) Also, choose a payment plan that is right for you. There are many options, like annual payments, monthly payments, or automatic payments (EFT). Communicate with your agent. Don’t let your policy go out of force!
4. Spending too much on insuring your car, carrying too low of a deductible, or insuring physical damage on a car with a low value. In the event of a total loss, all insurance companies pay Actual Cash Value (ACV) not replacement cost. Actual Cash Value is the depreciated market value of the vehicle. You should research your car online, to get an idea of how much cars like yours sell for in your area. Then decide if it is cost effective to carry comprehensive and collision coverage.
3. Not understanding who is covered. Who is defined as a named insured? You should check the contract, to understand who is covered to drive your car. Do you have permissive use on your policy? Or is your policy a “named driver” policy? Who is excluded? If you are not feeling well, and your friend drives your car home, are they covered to drive your car? Take the time to read your policy.
2. Carrying lower UM coverage or carrying uninsured motorist and underinsured motorist coverage that does not match your liability limits. You can lose everything you have if you’re hit by someone with no insurance, or not enough insurance. You should carry the same limits of uninsured/underinsured motorist (UM) coverage that you carry for liability. There is a chance you might become disabled, short term or long term because an uninsured driver collided with you. Your UM coverage would help to pay your medical bills, and loss of income if you are unable to work, so make sure your UM matches your liability limits. Remember: 25% of drivers on the road in California are uninsured! (Study conducted by the Insurance Research Council, published in the Insurance Journal, on-line)
1. Carrying the state minimum limits of liability. If you cause an accident, you may find that the liability limits you purchased are not sufficient to protect your assets. The state minimum limits of 15,000 per person, 30,000 per accident, and 5,000 property damage is simply not enough liability coverage in today’s world. The law was passed in the early 1940s and the limits have never been raised to keep up with inflation, and the high cost of medical bills, and auto repairs. You should make sure you have enough coverage to protect your assets and your future earnings. Everything you have is at risk every time you or someone else drives your car! Not carrying enough liability coverage is the number one mistake people make regarding auto insurance.
