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 too 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 affect you, your family, your livelihood and your wallet? 

FACT, every company I have encountered offers the usual four discounts your car qualifies for; anti-lock brakes, airbags, daytime running lamps and alarm systems when it comes to cars.  Maybe you get another discount for using your car a limited amount of mileage, national average is about 12,000 miles per year.  Maybe you get a multi-car discount if you own additional cars.  After this, it starts to get interesting which makes it almost impossible to accurately compare companies.  Be careful, ask lots of questions and review your policy each year.

5/12/2015  Updates

The lesson here is the statements above really have not changed.  Rating engines(the algorithm behind the companies) are more sophisticated than when the post was written.  What does that mean?  It means that the percentages and advertised discounts are less important than they were at the time of this post. There can be wild swings in your rate but this is more based on changes to your personal status and chaaracteristics than anything else.

The larger companies still have not learned how to advertise their “product” and have instead allowed it to become commoditized.  This is actually a good thing for you despite the confusion.

Beyond that, the facts are the same; determine the coverage levels you are comfortable with.  Shop accordingly.  Plan on remaining in the upper portion of the available market instead of trying to find the lowest.  You’ll save less money by overshopping than you will be doing a reasonable amount of shopping.

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 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.

I was hoping to find some for sale, however, was unsuccessful so where does that leave me?  With a $1000 collision deductible I may see somewhere between $1100 and $2200 dollars in the event of a total loss and the coverage costs about $100 for the year.  It still looks like I am ahead and I would not mind having that money to buy another car.  That being said, IN MY OPINION, it is almost time to drop the coverage.

Why should you do this, so in the event of a claim you are not surprised at the first offer that an insurance company makes.

5/12/2015 UPDATE

This car was sold in July off 2013 for $550.  There was a very large market, larger than I thought there would be.  Definitely could have received more for it.  But at that point, my conscience and moral compass stepped in and we all felt very satisfied at this price.  It does go to show, as in this post that there is absolutely a market for cars that you cannot find on the internet.

 

 

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.

Try and find a consensus.  Visit Kelly Blue Book (www.kbb.com) and/or Edmunds (www.edmunds.com) to help determine the value of your car.  Be reasonable with the condition and figure the middle number is about where you are.  How do you double check this try a car buying site like www.autotrader.com .  Give yourself a reasonable driving radius and try and find your car.

When should you do this?  NOW and/or right after an accident

Maybe it is not worth keeping collision coverage on your car?  It is also a great idea to know what your car is worth when the car is being assessed for damage.

THESE ARE IDEAS, YES THEY ARE GOOD, USE THEM BY YOUR OWN CHOOSING.

5/11/2015 UPDATE

I’e been paying closer attention to this for 4+ years.  Despite the tools suggested above there are a few other things to consider.

  • There seems to always be a market for pick up trucks.  The color does not seem to matter, dents don’t seem to manner either.  Somebody is always looking for one
  • Older Hondas.  They are just popular across a variety of segments of people.
  • Subarus. Especially the all wheel drive ones.

Im sure there are lots of others you can enlighten me on, these are just a few that seem to stand out.  Why does it matter?  Because the market for your car or a car that you may buy can vary for a bunch of reasons.  The computer models mentioned above are solid but don’t overlook “market” factors.

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?

Insurance rates go in cycles, the industry refers to these as soft and hard markets.  What does this mean to you?  It means if you can review your plan every twelve months you should.  If you go any longer than 18 months you will likely miss a savings opportunity for your family.  One of the worst parts about being an agent is reviewing a plan that has not been reviewed in 2-5 years or more and finding huge savings that could have just been nice savings.  How long were they overpaying for?

Update 5/11/2015

This is still true.  If anything, since this post was first published this is even more important.  The personal insurance market has become even more slanted towards the consumer.  More accurately, the consumer has become more self-reliant, technology has improved and the interest in value over price has increased.

Has the timetable stayed the same?  YES.  To be honest, if someone really wanted to they could max out the savings by lowering this timetable to every six months.  BUT keep in mind that any savings you may find will likely not match up with the current time it takes to switch.

So?  Stick to the 12-18 months and understand that until the available technology improves this is a great plan.  Until the time it takes to switch goes down, the number of times to switch in a time period shouldn’t be any higher than it is now.

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

Really is kind of sad but this has not changed since the first post.  Most of the people I come in contact with have not been afforded this very basic amount of coverage.  Such a shame but consider it from a few angles;

1. AGENT “selling” insurance; This is awesome.  You can help the world while also making your sale that much easier.  EASY point of differentiation.  EASY way to improve the life of another human.  Jump all over it.

2. CUSTOMER; I am sure you know this by now but you are more in control than ever.  Shameful your agent may be taking this shortcut.  It is also sad but most of the new on-line aggregators are taking advantage of you as well

Just some thoughts.  Most days it is the little things that get overlooked.

DISCLAIMER

My ideas are just that, see the previous post on believing in accountability.  Some are fact based some are based on the law some are my own logic.  Choosing to use them or not to use them is up to you not me.  At the end of it all these are your insurance policies I might just help you buy them smarter.

5/11/2015 Update

All of the above remains true.  I would adjust it to say, most are fact based and all are then complimented by;

1. An understanding of the law

2. An understanding of the industry

3. I DO help you buy them smarter.  No “might” in there

Ideas and the reason I write

I believe in accountability.  I also know that there are a lot of pretty simple ideas and concepts that if followed can really impact your rates, your coverage and maybe your impression of insurance.  Hey if you have to pay for it it might as well be what you want.

5/11/2015  Not much has changed since the original posting date.  Still, believe and think exactly as written above.  The difference is that the industry has shifted and I now have more ways to help improve your coverage and impression of insurance.

But what about the writing?  Well yes, in many cases the writing is better.  We have also explored many non-insurance topics.  Hopefully, most of it is useful.