AUTO INSURANCE: DO NOT BE CHEAP

People: please wake up and remember the purpose of having auto insurance. The purpose is to make sure you are covered when an auto collision occurs. Having the right coverage and the right insurance company is important, if not imperative. A little internet research will help. For example, you can review insurance companies by searching the internet. See: http://www.clarkhoward.com/best-auto-insurance-companies or http://www.badfaithinsurance.org/indexdetaillist.html Nonetheless, insurance companies change. For example, State Farm was in the middle of the pack, but in my opinion, they are quickly heading down to the AVOID category. Allstate and Farmers are improving, but in my opinion, they are still to be avoided. The important thing is to do the research and do it often. Most people like cheap and they will get the cheapest rate and the cheapest coverage. When they are in need of assistance, they are shocked how their own insurance is fighting them, instead of helping them. I hear it every day: “I paid my premiums for ten years, and now they are playing games and not wanting to cover my medical bills.” Buying insurance is like buying shoes. However, people do not buy the cheapest pair of shoes regardless of fit and comfort. Yet, those same people will buy the cheapest insurance possible regardless of fit and coverage. Buying cheap insurance with little coverage makes about as much sense as buying cheap plastic flip flops for work instead of buying an appropriate pair of shoes that are both economical and comfortable and provide the right “coverage.” Going to work with plastic flip flops may be okay for a while, but you will regret it the first time someone steps on your toe at work or your boss gets upset over your lack of “coverage.”

You need to get the right insurance company with the appropriate coverage. Sure, you can look for a good deal, but make sure you are selecting from reliable insurance carriers. Also, make sure you have medical payment coverage and UM/UIM coverage. Medical payment coverage will pay medical bills regardless of whose fault it is. If you cause the collision, your liability insurance (15/30) will pay others, not you! Thus, the medical payment coverage helps you (and your passengers) with medical bills. Also, UM/UIM coverage will give you coverage if you are not at fault, but the at-fault vehicle has no insurance or little insurance. Remember the law only provides for 15/30. That means that the most the at-fault party is legally required to have is $15,000 per person OR $30,000 per accident. If you are in a car accident with your wife and three children and the at-fault driver had his wife and two kids in the car, that means that everyone who is not at fault (in this case 8 people) need to share the $30,000 maximum per accident. Thus, assuming everyone has equal medical expenses and equal injuries, the $30,000 will be split equally ($3,750 per person). That amount will not cover an ambulance (approximately $1,200 per person) and a hospital stay (approximately $10,000 to $25,000 per person). Also, that will not help cover the months of pain and suffering, months of needed treatment (if any), and possible wage loss (if any). Now assume the at-fault party has no insurance. Now you are stuck with the medical expenses incurred by you and your family. Sure you can sue the at-fault party, but people who cannot afford insurance generally not have enough assets to recover even the expenses incurred in suing them. Thus, the reality of the matter is that you must have UM/UIM coverage (and medical payments) to be adequately protected. There is a time and place to be cheap, but auto insurance is not it the right time or place!