I need your help.
Insurance – it sounds as exciting as a debate on what to do with grass clippings, but, as a young college student there a lot is to be learned about this subject. If you are like me, you never think about it until you need it or, more honestly, just pay and get it out of the way until another rate adjustment occurs. Some themes to tackle:
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Have you ever shopped around for car insurance? Where? How accurate are the comparisons that companies are so generous in providing? Are there third party sites that you recommend in gauging price and quality of coverage?
My car is a 1995 Plymouth Neon that, according to Kelly Blue Book, is worth approximately $1,300. It’s the only car that I’ve ever had, but it’s getting high in mileage (~150,000 miles), so I think that it is appropriate to re-examine my insurance coverage.
Quote:
Here it is for 6 months.
Coverage & Limits Cost $
Liability Bodily Injury 25k/ 50k
Property Damage 50k 223.34
No Fault 99.78
Medical Payments 10k 64.57
250 Deductible Comprehensive 38.64
250 Deductible Collision 95.79
Emergency Road Service 1.60
Rental Car & Travel 80% /day $1000 max 17.40
Death Indemnity 2.40
Total 543.52
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I want to adjust my deductibles (250, 500, 1000, no coverage), but I’m not sure to what amount; I’m having trouble wrapping my head around this stuff.
* Since that sassy, red Neon is worth $1,300,
what would be the appropriate deductible? I have ~$2k allocated for a new car and other liquid funds that could be used for a new car. I wouldn’t want to have the car totaled and get handed a check for $1,300 when I could have adjusted my insurance and just have that in the bank.
What are you thoughts? Do you have towing coverage? What are you driving and who covers you?
I found a little information:
Quote:
The best set up from Clark Howard's website
• Buy uninsured motorist coverage to protect yourself against uninsured or underinsured drivers.
• If you have a car loan and don't carry insurance, the lender may buy insurance for you at five or six times what you would normally pay.
• Collision coverage takes care of damage to your car from an accident that is all or partially your fault. Normally you'll be responsible for a deductible of $250 or $500, and your insurer pays the rest.
• Comprehensive coverage takes care of noncollision calamites, such as damage from a break-in, theft or windshield cracking.
• Liability is the most important component of auto insurance and the one to which people pay the least amount of attention. It pays for damage to property and physical injury from an accident that is your fault.
Jun 13, 2006 -- Drop towing riders from your insurance
Clark talked recently about how getting tow service from your insurance company can boost your rates if you use the service. The report got people up in arms and he has some follow up news for you. The story first came out in Consumer Reports, a magazine Clark highly respects. It said that AllState, State Farm and Geico all either raise your rates or report you to other deciding bodies. Clark wanted to contact the biggest insurer - State Farm – to see what they had to say. And, it is true. If you’re a State Farm, All State, Geico or Nationwide customer, discontinue the towing rider from your coverage. If you need the towing coverage, get it from Costco or BJ’s instead.
Below is the response Clark received from State Farm Insurance when he inquired about the possibility of insurance rates going up if customers use the towing rider on their policies...
When attempting to determine the cost of making the promises we make to our customers, we use many rating variables.
Among them are the customer's age, the customer's driving record, where the customer lives, what type of car the customer drives, how the customer uses the car, the customer's credit information and the customer's previous claims experience. Using any one rating variable is not very helpful in our effort to precisely measure auto insurance risk, but using all of them together is very helpful. All of these variables, and others, in conjunction with one another, help us determine the cost of the promises we make.
In almost all cases, emergency road service claims have no impact on our measurement of the cost of a promise. But under the right circumstances, it is remotely possible that emergency road service claims, in connection with other rating variables, could impact that measurement.
The bottom line is that we are attempting to use all of the information available to us to measure auto insurance risk as precisely as we can. We want to charge each of our customers a premium that is commensurate with the risk.
-State Farm Insurance
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I use State Farm. Have you ever have your rates go up because of a tow? Do you follow this format?