Each year my family packs up and heads to Cape May New Jersey for a week of fun with my in-laws, my wife’s brother and sister as well as their families. Now this is something we have been doing for years and have not really given any thought to insuring. See your homeowners policy has some coverage for you as does your umbrella policy if you have one. Also, realistically you cannot insure everything in your life sometimes you just have to live and deal with what may come up.
That by taking minimum coverage, $25,000/$50,000 in New York you are actually setting yourself up for higher rates.
That I tend to see this coverage more often from the company that does the most advertising.
That your low rate actual makes you pay higher coverage and in the event of an accident could hinder you financial for years to come.
The difference between minimum coverage($25,000) and better coverage($100,000) many times is about $5 a month.
That I cannot think of a circumstance that I would ever do this disservice to anyone. But then again I don’t provide quotes or promise you cheap insurance. Who wants to buy cheap things anyhow.
How do you know? How do you know that the liability coverage you took because your agent said it is plenty really is plenty? YOU DO NOT neither do I. There are some silly sayings out there “rule of thumb”, “it’s what most people take”, “You don’t need more” REALLY?
When you hear this please hand your agent a dollar and ask them to buy you a lotto ticket. Because they can apparently predict the future. Most agents cannot predict the future, I am one of them. Instead, I try and make some logical decisions and use your dollars to purchase as much coverage as we can. An example;
That’s right you can get more coverage for less money. Now the problem with this is most of the companies push low rates mostly give you low coverage. Then when you shop you are actually not able to get better rates because you got duped into a low rate by taking low coverage.
A solidly caffeinated(made up word) drink from your local coffee shop is sometimes the same price as one month’s worth of much better coverage. That’s right for $3-$6 you can purchase $100,000 or more in coverage. So is the company that brings you in on lower rates even interested in protecting you and your family or just providing you a low rate for insurance.
Do you trust your agent enough to get a second opinion?
How about asking your agent what coverage they have and taking a look at their declarations pages?
Sounds like fun to me, let’s see if your agent has full no-fault coverage. Let’s see if they have matching liability and supplemental coverage. Let me know how it turns out.
It has been over four years since this first post. Sadly, the majority of times I review a policy I end up saying;
I’m not saying it’s bad. I’m just saying I wouldn’t sign my name to it.”
Step 1.Remember why you have insurance, it is not for the little annoying thing that you can comfortably afford to fix. It is for the event that you need help paying to fix. Filing a claim because “I pay for insurance why shouldn’t I use it…” can get you in to trouble. **What is trouble? Trouble is having rates on the higher side of the market for at least three years**
Why not? When was the last time you changed companies? When was the last time you actually made your agent or broker actually earn their commission. Make them actually shop around, we are in a competitive market here in New York why not take advantage of it.
How do you start?
Pretty simple, two steps;
- Start with a “baseline” of coverage that you are comfortable with having in place.
- Talk to 3-5 companies to see where your rate compares.
That’s it. Worst case scenario you feel really good about your rate. Best case you save some money and maybe find a better agent.
I am aware of no way to ever say someone has too much insurance, the fact is you just never know. There is just 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.
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 the 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.
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.