We’ve all done it… looked at our auto insurance bill and thought: How can I lower that amount? There are ways to lower your auto insurance that aren’t destructive, such as making sure you’re taking advantage of all of the discounts available to you. However, many people reach a point where they have maxed out their discounts, and resort to modifying their coverage in order to lower their premium. Also, beware! Some agents are more concerned with getting your business than they are with your best interest, so they will quote you with less coverage in order to make their premium more attractive. However, that is not how East and Greenwell does business. We want you to have an affordable premium without sacrificing protection for you and your loved ones. Here are three dangers of cutting your auto insurance coverage to save money:
- You could leave yourself and your assets vulnerable if you are found at fault for an accident. Decreasing your liability coverage is sure to lower your premium, however, when you evaluate the risk of reducing this coverage and potentially leaving yourself vulnerable, it’s not worth it. If you or another driver on your policy are found at fault for an accident, you will be held liable for any injuries to the other party as well as any damage to their vehicle or property. The sad reality is that when lawyers get involved, they tend to inflate the amount that the claim is placed for. If you have adequate liability coverage, these situations can be handled very smoothly by your insurance company. However, if the amount you are liable for is greater than your coverage amount on your policy, suddenly your money, assets, and even future income is all at risk. This begs the question – how much coverage is enough? The answer is different for everyone, but a good rule of thumb is that you should at least have enough to cover your net worth. This is why many people opt to carry an umbrella policy, which comes in to play in the event that the liability coverage on your auto policy is maxed out.
- You could leave yourself and your family without medical coverage if injured by an uninsured driver. Uninsured motorist coverage is one of the most misunderstood coverages on Florida auto insurance policies. People see “uninsured motorist” and think – Why am I paying for someone who doesn’t have insurance? Because this coverage is misunderstood and is not required by the state of Florida, many people choose to forgo it. Let’s be clear. Uninsured motorist coverage is not intended to pay for coverage for the other party. It is to ensure you and your family’s medical bills would be covered on your own policy if you were injured by someone who is uninsured, under insured, or in the event of a hit and run. Imagine your spouse being injured in an accident caused by someone else, and finding out that person has no insurance. Without uninsured motorist coverage on your own policy, how will you pay for your spouse’s medical bills, or long term pain and suffering? This reality is all too common, especially in Florida. This is why you should think twice before lowering or removing uninsured motorist coverage to save money.
- You might leave yourself short changed if you have to repair or replace your vehicle. Collision coverage is another coverage that people tend to remove when trying to lower their insurance premium, especially if their vehicle is “older”. Many times, removing collision coverage does not result in significant savings. That being said, even if your vehicle is older and not worth as much as it once was, it may not be worth it to delete the coverage. For example, say that your 2006 vehicle is worth $5,000 and you decide to remove collision coverage at a premium savings of $20 per month. The following month you total your vehicle and you were at fault, so there’s no coverage from the other party. You would receive zero payout from your insurance company to purchase a new vehicle. On the contrary, if you had chosen to keep your collision coverage, you would have received a check from for your insurance company totaling the actual cash value of the vehicle minus your collision deductible. In that scenario, you would receive a check for $4,500 to put toward a new vehicle.
As you can see, removing collision coverage is not always worth the savings.
At East and Greenwell, we understand the need for affordable insurance, but our goal is always to help you achieve that without putting your family at risk by cutting coverage. Our agents would love to review your coverage with you and quote your auto insurance to make sure you have the coverage you need! Call 239-434-7877 today.