Car Insurance Mistakes That Will Cost You Money!

After spending thirty years in the insurance industry I have learned from mistakes and always endeavor not to repeat them. Mistakes that could cost me, as an agent, money and my clients money. One of the most frequent mistakes I have found over the years is selling insurance based on price and buying insurance based on price. Most agents and companies in order to compete will attempt to be the price leader while offering reduced benefits to the consumer. This is wrong. Just plain wrong. I have found that it is painfully true that "you get what you pay for".

Every state requires that if you own or drive a vehicle you must carry a minimum amount of liability insurance. This requirement is not to protect you but to protect other drivers you might crash into and cause bodily injury or property damage. These minimum limits are usually not sufficient to transfer your risk of becoming financially liable in an at fault accident. In Florida for example, the minimum limits are $10k per person and $20k per accident for bodily injury liability (BI) and only $10k for property damage liability (PD). So then, if you elect to purchase these minimum limits and cause an at-fault accident which results in medical bills to the other driver or passengers of more than $20k, you are going to be paying the difference out of your pocket. Let's be realistic here. Accruing $20k in medical bills for a car with 3 people in it is very, very easy. An ambulance ride, visit to the ER and possible 2 or 3 day stay in a hospital will easily amount to over $20k. Not to mention the new Mercedes they were in costing $45k to replace. See where I'm going with this?

You decided to buy the minimum coverage and save $20 or $25 per month and now you are being sued for $50,000 because the insurance company would only pay the limit you purchased. Like most people you will blame your agent or the 20 year old person on the other end of that 1-800 number you called for bad advice. And what is really going to upset you is that buying higher limits was not that much more money.

How do I protect myself you ask? Simple. When you go online or call 5 different agents get quotes for minimum limits and each bracket of higher limits that are available. Compare and see what will fit your budget and don't be a cheap skate when it comes to transferring the risk to an A+ rated insurance company. After all, insurance is just a piece of paper until it comes time for the company to write the check.