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Is there Really Such a Thing as TOO MUCH Insurance Coverage?

We have all been there… either sitting on the phone with our insurance agents, in their office, or meeting them at a local Starbucks. The thought goes through our heads, “DO I EVEN NEED THIS?” “IS THIS TOO MUCH COVERAGE?”

I don’t pretend to have all of the answers as to what insurance coverage is perfect for your family without talking to you about your goals and needs… however there are some basic insurance must knows that might be preventing you from taking the step into the coverage you really do need while hanging on to some pieces maybe you don’t.

Do I even need car insurance?

This might sound like a dumb question to most however you would be shocked to hear how many times I get asked this question on a monthly basis. It’s simple. YES. If you are driving your car you need insurance. You also need to talk to an independent insurance agent who understands your needs, budget, and availability. Insurance isn’t a one size fit’s all.  In this article you will see how carrying certain coverage’s are beneficial to you but also not worth sacrificing other important coverage’s over. Keep in mind… INSURANCE IS NOT A ONE SIZE FITS ALL… and for the love of Pete… you need car insurance.

Letting Go of “Bertha’s” Comprehensive and Collision Coverage

You know who you are. You have a 1972 Plymouth Neon that you still insist on carrying Comprehensive and Collision coverage on. The paint is chipping off, there is a dent in the bumper, and basically there are more French fries in between the seats than one would find in an entire happy meal. However, you insist on carrying physical damage coverage for the vehicle in case you are ever in an accident “you want to make sure you get at least something for it”.

I beg this of you. Talk to your agent, head to Kelly Blue Book and run yourself an estimate (be honest also in this estimate about the fabulous condition your vehicle is in). Do this math in your head…

  1. How much am I paying for Comprehensive and Collision coverage on my vehicle only every 6 months?
  2. How much is my vehicle worth?
  3. How long would it take for me to equal the two

If you do the math and feel good about carrying the coverage on there. Fine. Do it. However, do not ever sacrifice important coverage’s such as bodily injury liability, medical payments, or uninsured and underinsured motorist coverage because of “premium” if you choose to keep Comprehensive and Collision coverage on your vehicle. Remember this… You do not have a choice as to whether or not you want to fix another person you cause physical bodily injury to in an accident. You just don’t. However you do have the choice as to whether or not you fix your own personal vehicle.

Be Smart. Talk to Your Agent. See if you are unnecessarily carrying Comprehensive and Collision Coverage.

The Extra’s You Might Have that you think are Free but aren’t

When working with an insurance agent it is crucial to understand the “extra” coverages you have built in to the policy and the ones you are paying for. There is a large difference there. Examples of coverages that are built into an auto policy are things your permitted driver using your vehicle to legally drive you to the store… you don’t pay for this… it is built in. However, having glass coverage, this is something you typically are paying for. Be careful when working with an agency that states you have FREE glass coverage. This doesn’t mean they are calling it good and throwing in that coverage for you because you wore Black into their office that day. This means you are paying for glass coverage so if you ever have a chip or need a repair you then would not have to pay anything out of pocket at the time of occurrence.  Some other things that you are paying for on your auto policy that you might not be aware you are actually paying for:

  1. Towing Coverage
  2. Car Rental Coverage
  3. Loan/Lease Gap Coverage

These coverage albeit important when carried at the sacrifice of more important coverage’s are things that can easily be cut out to cut premium. Again, you want to review with your agent to sure you are allocating your premium dollars in the best spots for your families needs.

I am a “winter traveler” and my Car Sits Parked for 6 months in the winter time as I head to Arizona…..

This is one of the biggest (I won’t say mistakes) educational opportunities  I give to my clients who visit me in the cold 65 degree winter months in Arizona. If you are not operating your vehicle for an extended amount of time you are paying for liability coverage you may not need. Now… this idea does not apply to everyone (call your agent). However, there is a way to keep physical damage coverage in place on a non-driven vehicle and remove your liability coverage while it is not being driven. All while appeasing the Motor Vehicle Department. Who knew?!

You can please the MVD (not an easy task), protect your beautiful Lotus you are leaving parked, all while keeping money in your bank account. To me this sounds like a win.

If you have additional questions about “de-registering” a vehicle or about this process you can also visit Arizona Motor Vehicle Department.

Over Insuring Your Home

What most consumers don’t understand is that when you insure your home you aren’t just throwing a number out there and hoping it sticks. Our job as an insurance agent is to run a Replacement Cost Estimator that allows us to accurately tell us and you what it would cost to replace your home if you had a total loss. There are so many reasons why this is imperative to do. However, the largest reason is preventing under and over insuring of your home. In this case specifically if you are over insuring your home it will never guarantee that amount in the event of a total loss. Example…

You have a 180,000 home. You insure it for 500,000. Guess What…. You get 180,000.

Get it? So now you just wasted money insuring a home for more than what was necessary and will never get anything back for it. This is key especially in first time home buyers or someone who maybe owes a little more on their home than what the replacement cost is on the dwelling itself. Talk to your agent, there are laws in place, coverage’s in place, and ways to make sure you are adequately covering your loan and your home without wasting your money in the process.

While on topic of the replacement cost estimate you want to make sure to update your agent to any new home updates or upgrades you have done to make sure you are always getting the most current and accurate Replacement Cost on your home. By being proactive and letting your agent know you will save yourself tons of time later in the event of a claim. When in doubt take pictures and email.

Do I really need this Personal Liability Umbrella?

I realize I am kind of jumping all over the map when it comes to this blog article… however I felt it was important to display a wide variety of questions I personally have been asked when it comes to possibly being “over insured“. This one is probably my most common question.

                                                                          Do I really need a Liability Umbrella?

I will be 100% honest with you… insurance agents don’t sell umbrella policies to make money. There I said it. We just don’t. We sell umbrella policies if and when there is an apparent need to protect a family. So what is an umbrella policy?

It is an excess liability policy that “follows you around” just in case the current limits you have on a policy aren’t enough. Normally they are quoted as 1 million, 2 million, 5 million… you get the picture. Do you need one? I don’t know… do you? If you killed someone in an accident would your liability limits on your auto policy be enough? Probably not right? This is one of those policies that can easily not be paid attention to if you are not given the opportunity to see it’s value. I could spend an entire article giving you examples and stories of reasons why you need a liability umbrella policy (oooo new blog material). However, this is one of those policies that also requires a conversation with your agent. Don’t live in “worst case scenario land” like us insurance agents do. Let us live there for you and allow us the conversation. By not having an umbrella policy in place you really could be exposing yourself to greater risk and financial stress in the future.

In conclusion the type of insurance you need as a family isn’t for everyone. There is not one “well what’s the standard” nor should their be. A 19 year old young man starting his life isn’t going to need the same coverage in place as a 39 year old man protecting his family. However, both require coverages fit for them. By over or underinsuring either one of them it would be wasting their money. This requires a personal relationship with an independent insurance agent. We can customize your needs so you aren’t OVER INSURED and your coverage fits your needs and budget. GET OPTIONS. GET EDUCATED.

The biggest mistake any consumer can make in the insurance business is purchasing insurance out of fear something awful will happen. However, logically preparing for that “what-if” will save you both time and money if something ever were to happen. Can you always purchase more insurance coverage? Sure. Is it what’s best for you? In some cases no. Allow the conversation and don’t be afraid to ask questions.

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