Saving money is bad…sometimes

You hear it constantly on the radio and T.V. It shows up in your mail on a weekly if not daily basis, heck a banner ad probably popped up before you even got here.  Each insurance company quoting exactly how much money they can save you or how many discounts are available and rarely getting specific on coverage.

Yes, I think saving money can be bad.

If you have not taken the time to review your insurance plans on a regular basis you may actually be saving too much money.  Yes I just said too much money.

Are you overinsured?

I am aware of no way to ever say someone has to much insurance, the fact is you just never know.  There is though one circumstance you can say you may be overinsured when it comes to a home.  An insurance company is insuring the cost to rebuild your home.  They are not covering your tax assessment nor are they covering the market value of the home or even what you think your home is worth.

Discounts or advertising

Enough already with “…with discounts up to 40%” or “..15mintues can save you…”  or ” the more policies you have the more discounts…”

  • Is it really a discount if your base rate is to high to begin with? 
  • Is it really a discount if you have to purchase a policy you don’t already have to get it? 
  • Would you only give your accountant, doctor, lawyer or even your mechanic only 15 minutes to review something that can effect you, your family, your livelihood and your wallet? 

The Anatomy of a Car’s Value

2003 Volkswagen Jetta GL:  So according to KBB.com  the Good Trade in Value is $1700 and Fair is $1125 so maybe I am around $1500.  Now private party says $3225 and Fair is $2525, let’s keep being reasonable and say $2875 as private party we won’t use retail because this car is not in excellent condition.

How about Edmunds?  A little different process here comes up with $2734 as a trade in $3752 as a private party, same thing here retail seems a bit high.

So KBB average with my adjustments is $2187.50 and Edmunds is $3243  that is about a $1000 difference.

What’s my car worth?

It is your means to get around town, to work, to play to kids activities.  it is worth a lot to you but what is it worth to an insurance company?  The cost to repair a car is going up so if your car is older you need to keep in mind that if the cost to repair your car is more than the value of the car it may not get fixed.  Now what is the car actually worth in dollars?  It may not be as much as you want.

How often should I review my insurance?

Well most people see their family doctor once a year for a checkup.  Most people do their taxes each year and have a review with their accountant.  If you have health insurance you probably review that at open enrollment each year.  As part of a sound financial plan all of your insurances should be reviewed each year.  Why?  Are your discounts and coverage adequate?  Could you do better?  Is your personal information up to date?

Want another reason?

New York No-Fault coverage, simple question…

If given the choice would you want $50,000 or $175,000? Easy answer right.  What if you could have $50,000 to pay for all of your medical bills and lost time from an auto accident or $175,000?  Another easy answer right.  Now check your auto insurance policy’s No-Fault(also called Personal Injury Protection PIP) section and make sure you have $175,000.  If you do not have the full amount please call your agent immediately.

If you are wondering what else your agent has not done for you call me immediately.

UPDATE 5/11/2015