Back to car insurance...Are you getting RIPPED OFF?

I was interrupted in my blogging about car insurance by that article I came across regarding Bo Jackson. So today I thought I'd do a question and answer about car insurance.

Question: Should I keep physical damage (comprehensive and collision - 'full coverage') coverage on my car?

Answer: This is really a tough question and it really depends on your situation. As a rule-of-thumb, I say if you can afford to replace the car you probably don't need physical damage coverage. However, you may want to depending on the circumstance. If you have a car worth $5000 and you don't want to fork out $5000 to replace it you may want to keep physical damage coverage. But always remember the most the insurance company will ever reimburse you for is the blue book value of the car.


Question: Why not just carry the minimum required liability limits required by law?

Answer: As my examples of a few days pointed out, $25,000 worth of liability insurance is probably not going to be enough insurance in a serious car accident. If you are found liable for damages in excess of the amount your car insurance provides, you are on the hook for the remainder. You might have to sell your home. The judge might order your wages garnished. The judge might seize your savings and a whole host of other things. Also, many companies view people that carry higher liability limits as better risks. Meaning they will place you in a better insurance market if you come to them with limits of $100,000/$300,000.


Question: Why does my insurance company look at my credit?

Answer: Many insurance companies have found through various studies that those who manage their finances better tend to manage all parts of their lives more carefully. If someone pays their bills on time it is believed they probably also take better care of their vehicle. They probably also drive more responsibly. Now whether or not you agree with that is up to you. But right now credit scoring is part of the insurance land scape.

I have a whole bunch of more questions answered in my FREE REPORT:

How To Make Sure An Automobile Accident Doesn’t Destroy Your Family’s Dreams And Future!

E-mail me at brad.j.baldwin@gmail.com for your FREE COPY.