“I want the cheapest policy possible.”
As an insurance agent- I hear these words over and over and over again.
In fact- I remember hearing these words distinctly last November when I was doing an insurance review with a long-time customer who was trying to shave down his policy. One of the things he asked me about was what it would save him if he were to change from “full coverage” to “liability only”.
The phrase full coverage is not a “real” insurance term- but is commonly used by people to describe both coverage for the car and injuries to a person(s) in an accident that you cause (commonly known as “liability”) and coverage for your car and injuries to yourself/your passengers if you caused the accident.
You can also add coverage so that you can have a rental car to drive if your car is in the shop, add coverage to pay for the tow truck, add coverage for extra parts that you have added to your car (such as a wrap, sound system, special wheels, etc), and add coverage if you are a Uber or Lyft driver.
Legally, the only thing the state of Wisconsin requires is that a person has liability coverage in order to drive a car. In other words, the state believes that if you are going to drive a car, then you should have the financial means to pay for damages that you may cause to someone’s vehicle or their actual body if you crash. However, the amount of liability insurance that is required is a very small amount (if you think of it on a sliding scale). Just because you have the required amount – it doesn’t mean that if you are actually in an accident that you will have enough insurance to walk away without having to pay any money out of pocket.
If you decide to have a liability only policy (no coverage for your own vehicles)- that means that you do not have comprehensive or collision insurance- which would help pay for your own car if you got into and accident that you caused.
Comprehensive insurance is a coverage that we see used quite a bit in our office- and it is one of the less expensive coverages to add to a policy. This is one of the coverages that you pick your own deductible for (deductible = the amount you have to pay first before the insurance kicks in). If you select a high deductible- the cost is less than if you select a low deductible; however, usually even a low deductible isn’t too expensive.
Comprehensive coverage will cover you for anything that happens to your car other than if you collide with something. Examples are if a deer hits your car, your car is stolen, someone keys your car, a tree limb falls on your car, your car starts on fire, etc. It also replaces your windshield. With our company, if you have comprehensive coverage, if you have a crack or chip in your windshield- you get those fixed for free.
Collision coverage is coverage for your car if you collide with something (either another car or a fixed object). You also select your own deductible for this coverage- which means you have control over how much this coverage costs on your policy.
If you decide to go “liability only” you may also get rid of the Medical Payments coverage on your vehicle. I caution people away from this. Medical payments covers you and your passengers. Since you are paying for your policy- you want to make sure that when it comes down to an accident- you get something out of it! If you cause an accident, you want to make sure that you and any of your passengers can get checked out at the ER or Urgent Care- and your auto insurance will pay for at least part of it under this coverage. If you don’t have great health care insurance- I suggest increasing this coverage to a higher amount. If you drive passengers around a lot- think about the fact that they may be in the car with you if you have an accident and you will want to make sure that you can offer them assistance if they are hurt.
Another way people try to shave money off their premium is to say no to towing and rental car coverage. Again, I strongly recommend thinking twice before doing this. If you are in an accident – you may need to have your car towed. Someone is going to have to pay for that- and it may as well be paid for by the auto insurance policy you already pay for. This is an inexpensive coverage to add- so when you analyze price, this one makes a lot of sense to keep. The nice thing about your towing coverage is that you can also use it even when you don’t have an accident… like if your car just breaks down on the highway….
Rental Car Coverage is literally my favorite auto coverage. Is it weird to have a favorite auto coverage?? Probably, but I don’t care. Once your car is towed, what are you going to drive? Do you realize how annoying it is to share a car with your spouse when you are used to having your own? I, personally, share an office with my husband and when our daughter got into an accident and we lent her one of our cars and shared a car for a week it just about killed me. Unless you have an extra car sitting at home or you literally have a life where you can sit at home and do nothing for two weeks without calling our office to complain- spring for the rental car coverage!
So… you want the cheapest policy possible, do you?
Do you really? You might say that now- but I can guarantee you that if you get into an accident, you will be kicking yourself and being frustrated that you slid the sliders down on the coverages in order to get that cheapest policy possible.
Because we can sell you a cheap policy.
We don’t want to sell you a cheap auto insurance policy because we actually care. (I know this isn’t what Uncle Ed says, but we actually don’t make enough commission on any one policy to spend a ton of time up-selling you simply to make an extra $1 or $2 / year).
That’s right- we actually care. We care if you have coverage to pay for medical bills if you get into an accident- so that you don’t have to choose whether to go to the ER for that head injury or to take your daughter in for an xray.
We care whether there is enough money in your underinsured and uninsured motorist coverages so that if you get hit by someone with less-than terrific insurance and you get injured and can no longer do your job… in fact… are injured to the point that you can no longer work- that there is some money to help you with the bills.
We care whether there is enough money to pay for all of the cars you hit on that icy road… so that if you are sued – you don’t have to sell the house your children are growing up in.
And yes, we care if you have enough coverage to get a new car if you get into a fight with a deer and the deer wins.
And we want you to care too.
I read somewhere that if cheapest was the best- the Yugo would have been the best car ever made.
Food for thought.