Free Gas From Mobil!

New Exxon Speedpass customers in FL, LA, MA, NC, NJ, RI and SC will receive a $20 ExxonMobil Cash Card (or a $20 ExxonMobil Credit Card statement credit if Speedpass is linked to an ExxonMobil Credit Card) for activating a new Speedpass account. To qualify for one of these great offers, just enroll and activate online by December 31, 2009!  See site for full details…

I just enrolled, and I can’t wait to get my $20 gas card!

I told Husband I was going to make up for that salary cut.  This helps!

Advertisement

10 Things to Consider About Insurance When You Pay Off Your Car Loan

The following information is not advice, it’s just my thoughts and opinions. I’m just a girl on the web, not currently licensed in insurance or anything else in any state. You should absolutely seek the counsel of an insurance agent licensed in your state before taking any action at all. Coverages and programs discussed may or may not be available in your state.  Coverage and descriptions are summaries, subject to the terms and conditions and definitions in your own policy .  Talk to your agent!

PT at Prime Time Money just paid off his car, and he wrote a post about the decision he must make about what to do with the extra money.  He mentioned the possibility of changing his insurance coverage now that he no longer has a loan.  I, being me, always have something to say, and that’s especially true when insurance is a topic.

So, should you change your insurance when you pay off your car loan?

That depends.  Here are some things to consider:

Only two coverages have anything to do with the type of car you have: Comprehensive and Collision.  Those are the only two coverages that cover the car itself.    That’s why the lienholder requires it – they don’t care if you’re hurt or if you hurt someone else; they just care that their collateral is covered.

Collision covers damage to your car when your car hits or is hit by another vehicle,  or other objects.  It pays whether the incident is your fault, no one’s fault or a hit and run.  Most people carry a deductible, so the insurance pays the amount of loss after your deductible is reached (paid by you).

Comprehensive (also called Other Than Collision) covers most other things that physically happen to the car – if it’s stolen, damaged by a hurricane, flood, falling object, or animals. Most people carry a deductible, so the insurance pays the amount of loss after your deductible is reached (paid by you).

So, what should you think about doing?

1. Find out how much you pay for each of those coverages, and determine your deductible.
2. Get quotes for raising the deductible(s) and for eliminating the coverages altogether. Get the quotes for each individual coverage so you can see what they cost separately, for all your cars.
3. Consider what you’d be giving up. I suspect you’ll find that you won’t save as much as you think, especially with Comprehensive coverage.  Also, keep in mind that if you remove them you will be completely out of luck if you get into an accident that is your fault, if it’s a hit and run or if the at-fault party doesn’t carry enough coverage to fix your car (Florida only requires $10000 property damage coverage.  Have you thought  about what happens if they hit more than one car, or if you drive something that $10000 wouldn’t fix?).  Also, you’d have no coverage if it’s stolen, damaged in a hurricane, etc.
4. Figure out how much of a loss you could absorb without too much financial difficulty. Compare it to the cost of the coverage. Could you come up with the money to replace your car to fix it if the damage is $1000?  $5000?  If it is a total loss could you replace it?  Is it worth it to you to spend X dollars for that peace of mind?
5. Figure out how much of a loss you could absorb without too much mental/emotional difficulty. Will you be able to sleep at night knowing that you’re not covered?  Is it worth it to you to spend X dollars for that peace of mind?
6. Consider starting a Deductible Fund.  Think about increasing the deductibles on all of your insurance (including health insurance) and putting that into a fund to pay those deductibles if you incur a loss.  You might be amazed at the money you can save, and over time you’ll almost always come out ahead (well, unless you’re really unlucky). I used to write an individual health policy where the difference in premium between the $500 deductible and the $1000 deductible was  (depending on the insured approximately) $600 per year – more than the deductible difference!  If you chose the $500 deductible you started off $100 in the hole.  Ridiculous. If the patient chose the $1000 deductible they paid less, and if they didn’t get sick they could save as much as $600!  That’s what they call a no-brainer.
7. If you decide to drop these coverages, consider keeping just Comprehensive. It doesn’t cost much at all, and in many states you can get your windshield replaced if broken without having to pay your deductible.  Many of my clients kept Comprehensive with the largest deductible just for the glass coverage.  My company actually would replace any of the glass on the car (side glass, mirrors) without requiring the insured pay their deductible, and the coverage often cost about $10 every six months.
8. You don’t want to reduce your liability or uninsured motorist coverage. They have nothing to do with the type of car you drive – you can do just as much damage with a brand new car as an old clunker!  In fact, you may want to get quotes to increase these coverages…
9. Consider getting quotes from other companies. Hey, as long as you’re doing the work.  And if you do, read my series on  Auto Insurance 101 to get some good tips!
10. Don’t forget to remove the lienholder! Make sure your insurance agent removes them as the loss payee – sometimes they forget.  It’s not that the bank could actually collect the insurance money if you had a loss, but it would delay your payment at claim time while they straighten it out.

Everyone’s risk tolerance is different.  There’s a reason why “insurance” is synonymous with “risk management”.  Whatever you decide, make sure you can sleep soundly.

And to anyone who pays off their car loan, congratulations!!!!

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

If you liked this post, check out these related posts:

Auto Insurance 101: Part 1 ~ Before We Shop Let’s Understand What We Have

Auto Insurance 101: Part 2 ~ 10 Tips for Shopping Smart

Auto Insurance 101: Part 3 ~ What to Do With The Quotes Now That You Have Them

Captain Obvious Reports: Sixteen-year-olds Maybe Shouldn’t be Licensed

Last week I heard a news story on the radio warning that sixteen-year-olds are too young to drive. According the the Insurance Institute for Highway Safety, a research group funded by the auto insurance industry, car crashes are the biggest reason kids die. They recommend increasing the licensing age.

According to an article I read, “More than 5,000 U.S. teens die each year in car crashes. The rate of crashes, fatal and nonfatal, per mile driven for 16-year-old drivers is almost 10 times the rate for drivers ages 30 to 59, according to the National Highway Safety Administration. Many industrialized countries in Europe and elsewhere have a driving age of 17 or 18.”

I don’t think that’s news to any of us, is it? These young teens are inexperienced, somewhat lacking in judgment and have a sense of invulnerability that has them take risks that perhaps they shouldn’t. New Jersey, the state where I grew up and got my drivers license, is the only state that says you must be seventeen to be licensed. And some states are as low as fourteen!

Now that’s surprising to me. Not that I loved waiting until seventeen. I was just as impatient as the next kid. Still, I was pretty mature, and I don’t think I would have been ready to fly solo at sixteen. And we’ve all been next to these youngest drivers on the road, watching as they have twelve people stuffed into the back seat of their Corolla, music blaring just enough to rupture the nearest eardrum, giggling and talking on their cell phones…

Graduated licensing, which has become the standard across the country in the past 15 years, requires teens to spend more time driving with a parent or other responsible adult before they go solo. Though these rules are sometimes difficult to enforce, many states tie these more stringent standards to declining teen crash rates. That’s a good thing, too. But is it enough?

In my years as an insurance agent I was the one who added the child to the parents’ policy, and I was the one who filed the claims as they came in. And came in they did. I thank G-d that I never had to report that a child had died, as I was in tears, struggling to maintain professionalism when I spoke to the families of adult clients that had been fatally injured in crashes. A child would have been…impossible.

Proponents for keeping the age at sixteen say that driving helps kids learn responsibility, and that increasing the age will make them less responsible. I do agree that it can be part of helping kids learn responsibility, but I don’t think that it follows that kids who have to wait an extra year are less responsible. In some cases I’ll bet they are more responsible…like when they have wait because they need to earn the money for their own insurance and car. A strategy which will be utilized in this household.

See, safety isn’t the only reason to have them wait to get licensed. Cost is another factor. I recall being seven months pregnant and daydreaming about the son that was soon to be born whilst blow drying my hair. All of a sudden I had an unhappy epiphany. “Oh. My. G-d. I’m going to have to pay boy car insurance rates!!!!”

Now that I’m a parent I realize that my responsibility to prepare my son to get his drivers license has many facets. Yes, he needs to know the mechanics of starting the car, switching gears, parallel parking, all of which he will be taught, ad naueum. He also needs to know and understand that cars, insurance and gas cost money. He will understand that because he will earn the money for all of the above before he’s permitted to get his license.

But that’s not all. He needs to understand that he’ll be driving more than a ton of metal, and that gives him not only the responsibility for his own life but the life of anyone in his car, and every other driver and pedestrian on the road. He needs to have empathy, and to know that getting there safely takes priority over getting there quickly. He needs to be secure enough in himself that he doesn’t need to show off for his friends by peeling out or doing donuts on someone’s lawn.

He needs enough of all of the above to not get behind the wheel when drinking. He also needs to not get in someone else’s car when they’ve been drinking, and have the strength and sense to prevent them from driving at all.

The thing is, no state law is going to teach my son these things. Only Husband and I can. So though I wouldn’t mind seeing the driving age raised, it’s really a non-issue to me.

Because we will decide when Son is ready to be licensed, not the state. I don’t care if the law says 14, 15, or 17 . Son will not drive until we, as parents, agree that he is ready. We are the law of this land. And we shall be fair and reasonable, and unafraid to say “No”.

Why You Should Consider a Personal Liability Umbrella

My father is part-owner of an apartment complex where tenants are not permitted to have pets. The complex was sued by a woman who was bitten by a dog that was owned by a friend of a tenant, and the bite happened in a park across the street from the apartments.

No way she’d win, right?

Wrong.

It burns me. It really burns me. The woman’s attorney successfully argued that because a brochure for the apartment complex had a picture of the park and mentioned that it was across the street from the apartments that the complex made it a defacto part of the complex. The woman was award over $300,000 for a very minor bite, plus attorney fees.

It is just so wrong, on so many different levels.

But that’s a corporation, right? Not something us individuals need to worry about, is it?

I think we do need to worry about it.

We live in a litigious society (though I have high hopes that somewhere, perhaps in Utah, it may be slightly less litigious than it is here in South Florida). In the first five minutes after I met one of my neighbors she mentioned three people she was suing (you can bet she has never been invited inside my house!).

The example I gave is of a corporation that got shafted, but ordinary citizens have to defend themselves against lawsuits every day of the week.

Everyone knows about cases like these:

• Kids Play – One person kneels behind another and a third pushes the “victim” over. In a recent case three 10-year olds were the players. One child broke his arm and the other two were sued. The case cost the kneeling boy $100,000 and the one who did the pushing $195,000.
• The Clumsy Worker – A 40-year-old window washer broke his heel in a fall after a downspout he was holding onto broke away from the house on which he was working. Although the worker was found partially responsible, the fall cost the homeowner $1.2 million.
• The Accidental Athlete – A 22-year old suffered permanent eye damage when he was struck by a golf
  ball. He sued claiming that the golfer who hit the ball had failed to look out for other players. The errant shot cost the golfer $160,000.
• Not-So-Funny Ski Bunny – A professional dancer suffered permanent knee damage — an end to her
  career—when she was knocked down on a beginner’s ski slope. She offered to settle for the $300,000 covered by the defendant’s insurance, but was rebuffed. The case went to trial, where it cost the defendant $2.2 million.
• Pool Tragedy – At an end-of-school swim party, a 16-year old dove and hit his head on the bottom of the pool. He became a quadriplegic, and the case resulted in a $1.5 million settlement against the homeowner.

Then there are the car accidents where someone is seriously, permanently injured, or the damage to the house down the street when your kid throws three dozen eggs at it on Mischief Night.

Horrible things. Such tragedies.

If I’m responsible I want to have the money to help people who are hurt – it’s the right thing to do. And if it’s a frivolous lawsuit I want to be able to defend myself without going bankrupt. We think that because we’re right, morally right, common sense-ally right, we’ll win. Not necessarily. Very not necessarily. And that’s shocking, isn’t it?

Whether I’m responsible or not I don’t want to have to give up everything I own to defend myself or pay a judgment. The way I see it we’ve worked way, waaaay too hard to stay out of debt and build up our savings and a few assets to give it all away to someone else. So, that’s why I think I’m finally going to buy a Personal Liability Umbrella.

A Personal Liability Umbrella policy provides an extra layer of liability coverage (usually starting at $1 million) over and above what the limit of liability on each of your underlying personal liability policies (i.e. homeowners, personal automobile, boat-owners, motorcycle, etc).

The policy covers “personal injury” liability such as bodily injury, property damage, sickness, disease, disability, mental anguish, false imprisonment, wrongful entry, libel, slander, humiliation, defamation of character, invasion of privacy, etc. The coverage is often broader than what would be covered on your underlying policy, as a typical Homeowners policy covers only “bodily injury” and “property damage” liability. So, if for example you are sued for making an allegedly libelous statement about someone in the newspaper, that would be excluded by your underlying Homeowners policy, but covered by the Personal Liability Umbrella policy, up to the limit of the policy.

Perhaps the most valuable aspect of a Personal Liability Umbrella is the coverage for the cost of defense of lawsuits. In addition to the $1 million liability, most Personal Liability Umbrella policies also pay for defense of suits that are not payable by the underlying policies, all expenses incurred by the insurance company, all costs taxed against the insured, premiums for appeal bonds, reasonable expenses incurred by the insured at the insurance company’s request, and interest on unpaid judgments.

The cost? About the same as one hour of an attorney’s time per year. One hour.

So, who should have one?

• Do you own your home or condo?
• Do you have children?
• Is there a teenage driver in the family?
• Do babysitters or cleaning people work in your home?
• Do you have a swimming pool?
• Do you ever leave your home in the care of a housesitter?
• Do you regularly ferry other people’s kids around in your car?
• Do you have a dog, snake, ferret or other pet?
• Are you active in sports, such as golf, biking, skiing, or mountain climbing? Do you own a boat?
• Do you own rental property?

In most cases, the more often you answer yes, the more likely you need an Umbrella policy. But for some people, one “yes” answer is all it takes. For example, lots of people who can’t sell their homes in the current market are renting them to others. I would absolutely, positively not even consider renting out any property I own without having an Umbrella in place.

Talk to your insurance agent for some more info. Most companies will only write the policy if you have your home and/or auto insured with them. And I may have to increase my auto coverages to qualify for one (my company requires that my auto liability limits be $250,000 per person/$500,000 per accident), but that’s okay.

Now I won’t have to worry if someone leaves my house with a cup of hot coffee in their crotch, spills it and sues me. Because, you know, I was really losing a lot of sleep worrying about that.

The preceding information is not advice, it’s just my thoughts and opinions. I’m just a girl on the web, not currently licensed in insurance or anything else in any state. You should absolutely seek the counsel of an insurance agent licensed in your state before taking any action at all. Coverages and programs discussed may or may not be available in your state.

Did you like this article? Be sure to check out my other articles on insurance:

Auto Insurance 101: Part 1 ~ Before We Shop Let’s Understand What We Have

Auto Insurance 101: Part 2 ~ 10 Tips for Shopping Smart

Auto Insurance 101: Part 3 ~ What to Do With The Quotes Now That You Have Them

Auto Insurance 101: Part 3 ~ What to Do With The Quotes Now That You Have Them

The following information is not advice, it’s just my thoughts and opinions. I’m just a girl on the web, not currently licensed in insurance or anything else in any state. You should absolutely seek the counsel of an insurance agent licensed in your state before taking any action at all. Coverages and programs discussed may or may not be available in your state.

This is the third installment of a series of articles about Auto Insurance. You may want to read Auto Insurance 101: Part 1 ~ Before We Shop Let’s Understand What We Have and Auto Insurance 101: Part 2 ~ 10 Tips for Shopping Smart before reading this article.

Okay. You understand what you have and you’ve shopped smart. Now it’s decision time.

Here are some things to consider as you look at the quotes.

1. These are only quotes. The insurance company is under no obligation to give you the rate quoted if you aren’t eligible for it, even if you get a binder of coverage. If the agent made an error, or if you forgot to tell them something that would affect the rate, the policy could be canceled or you could be offered a policy at a higher rate.

2. Make a decision well in advance of your own policy cancellation. If you’re switching companies get the new policy written as soon as possible. Most companies will allow you to do the policy 30 days in advance of your current policy’s expiration and have it be effective on the expiration date. That gives them and you 30 days to decide if you really, really like each other.

3. Don’t tell your old company you’re not renewing until after the new policy has been issued as quoted. That way if there is a problem you can continue with your current policy and the only things you’re out is your time and aggravation. If your old company does not give a grace period make sure you don’t have a lapse in coverage.

4. Longevity counts. The longer you are with a company the more favorably they’ll look upon you, and that translates into savings. Some companies will “forgive” (not raise your rate or cancel you) for a first accident if you’ve been with them X number of years. Some will reconsider cancellations for multiple claims. I’m not suggesting you stay with your original company if you’re going to save a considerable amount of money, but decide for yourself how much of a savings is worth losing the benefits of longevity.

5. This isn’t a one shot deal. Even if you can’t save a bundle this time, try again in six months, or a year, or when it’s been three years since your last accident or ticket. Just like medical checkups keep you abreast of your physical health, insurance checkups should be a part of your financial health plan.

Another thing.  I did speak in Auto Insurance 101: Part 2 ~ 10 Tips for Shopping Smart about how rates are cyclical.  I wanted to bring it up again because I cannot tell you how many times people would cancel policies with us to go to another insurer, only to come back six months later because the company had raised their rates significantly.  They didn’t always qualify for the rate they had enjoyed with us before.  Now you can’t plan for everything, but this again is another reason you have to decide the magic number that makes a switch worth the risk.  To you.

Even if you change nothing, you know more than you did. That’s almost always a good thing.

Good luck!

If you liked this article check out the rest of the Auto Insurance 101 Series, and check out ways to Stretch Your Dollar.

Auto Insurance 101: Part 2 ~ 10 Tips for Shopping Smart

The following information is not advice, it’s just my thoughts and opinions. I’m just a girl on the web, not currently licensed in insurance or anything else in any state. You should absolutely seek the counsel of an insurance agent licensed in your state before taking any action at all. Coverages and programs discussed may or may not be available in your state.

This is the second installment of a series of articles about Auto Insurance. You may want to read Auto Insurance 101: Part 1 ~ Before We Shop Let’s Understand What We Have before reading this article.

Now that you’ve read Auto Insurance 101: Part 1 ~ Before We Shop Let’s Understand What We Have and have spoken to or met with your insurance agent, you’re almost ready to shop.

Before you get on the phone or start surfing the web, here are some important things to remember when shopping for auto insurance:

1. Know who you’re talking to. Ask the agent you’re speaking with about their qualifications and experience. How long have they been selling insurance, and how long have they been licensed? What types of insurance are they licensed to sell? In all my years as an insurance agent no one ever asked me this, and it just shocks me. I will always ask this question of insurance agents, doctors, attorneys, etc. You want someone who knows what they’re talking about, don’t you? It takes at least a few years to become familiar enough with just about any vocation to be able to understand nuances, and to see the bigger picture of how one decision affects another. Don’t be embarrassed to ask to speak to someone with more experience.

2. Compare apples to apples, as closely as possible. This is probably the most important thing to remember. Spending our time calling around without getting the same quote for the same coverages will not help us make an accurate comparison, so it’s a massive waste of time. Sometimes companies may offer slight variations in the same type of coverage. Company A may offer Car Rental coverage of 80% of the daily rental up to $500 while company B offers $25 a day up to $400. Another example: in Florida insurers are required to waive the deductible for windshield replacement for those who carry Comprehensive coverage. My company extended the deductible waiver to any glass breakage (side windows, mirrors) while other companies did not. Make sure to ask about and note these differences.

3. They’re likely going to check your credit. No matter your feelings on the validity of the actuarial process, most insurers will factor in your credit rating when quoting insurance. People with better credit will get the batter rates, period. Another reason for fiscal responsibility. Be prepared to give your social security number, and try not to take it out on the agent. They don’t make the rules. Also know that while an insurance inquiry doesn’t have the same effect on your credit rating as a credit inquiry, it is still an inquiry. If it didn’t affect your credit rating at all, they would have told us to tell you that it had no effect. They didn’t.

4. Financial strength counts. Their fiscal responsibility counts, not just yours. A good balance sheet not only reassures you that they will be able to make claims, it also suggests that the company is managed well. Personally, I’d only go with a company rated A or better by a rating company such as AM Best.

5. Reputation counts, too. If a company has a bad reputation for either claims or customer service, don’t bother getting a quote. That’s just a headache waiting to happen. That said, no insurance company has only happy insureds. People get angry when their claims don’t get paid, even if the insurer is completely justified in not paying it. That’s another reason it’s so important to know your coverage.

6. Consider the advantages and disadvantages of the different ways you can buy insurance.

• Captive Agents – sell policies for (usually) only one company, and usually a major insurer (State Farm, Allstate, etc.)
• Local Insurance Brokers – sell policies for many different companies, some larger, some smaller (Progressive (also sells direct), Integon_
• Direct Insurers – sell directly to the consumer (Geico, etc.)
• Internet Brokers – gather your information and get quotes from several insurers at once, without having to speak to anyone (Insweb, etc.) Some captive agents’ companies and direct insurers also allow you to get quotes online.

Personally, I want an agent. I want someone I can go see if there’s a problem, and someone who can go to bat for me, if need be. Agents want to keep you happy. They only make money if you stay with them and pay the premiums. Often times an agent can get a claim paid, or get a cancellation rescinded. Last month my mother got a cancellation notice from her insurer, as she’d had 2 claims in a year. I called her agent and they were able to call the underwriter and get her another chance. Direct insurers can be great, but it’s hard to create a relationship with them. They are just a voice on the phone. That doesn’t mean you shouldn’t get a quote from them, but it’s something to keep in mind.

I’m going to do an entire article on the pros and cons of each of these, so look for it soon!

7. Know if the insurer is a stock company or a mutual company. Unlike a stock company, a mutual insurance company does not offer shares of stock on public exchanges. Rather, it is operated and maintained for the benefit of its members, or policyowners. All policyowners have the right to vote for the Company’s Board of Directors and to receive a fair share of the dividends declared by the Board each year. In a stock company, by contrast, any dividends are paid first to shareholders, and only after to policyholders. Not a huge deal, but having stockholders sure can affect a company’s policy decisions. And it’s always better to know than not to know.

7. Rates are cyclical. Even assuming nothing changes in your driving or claim record, rates go up and down. That’s because rates are also affected by what all insureds are doing, not just you. Insurance is all about sharing the risk, so if there’s lots of claims in your area you may see a spike in rates. And if they have a good year you may see the savings via rate reductions or dividends. I’ve gotten dividends on my auto policy many times from my mutual insurer.

8. Don’t assume that the big, “preferred” companies will have the more expensive policies. And don’t assume that the smaller ones do. You may be surprised.

9. If they won’t sell you the policy you want, call another agent. Some agents set “agency minimums”, setting a policy that they won’t sell any auto policy that doesn’t  have, for example, at least 100/300/100 liability limits. Whether they can/should or cannot/should not do this is a matter for someone else to debate. If you want lower limits than what they’re willing to write, ask if that’s an agency policy or a company policy. Or just call another agent.

10. Two quotes from different agents from the same company for the same coverages with the same deductibles should always be exactly the same. To the penny. If it’s not then something is wrong. Perhaps one person has mis-classified how you use the vehicle, perhaps they rated you in the wrong territory. You need to find out what.

Also, if you have a child that will be driving in the next few years you may want to get some quotes for adding them to the policy when the time comes. Few people are really prepared for the sticker shock of adding a teen driver to the policy. Sure, the rates will change, but it gives you an idea. The more time you have to prepare the better.

Okay, you’re almost ready. Before you begin, make sure you have your Declarations Page (which lists all of your current coverages) in front of you. Also have the quotes for different coverage and deductible options that you may have gotten from your current insurer, and any notes you may have taken while speaking with your agent.

Once you’ve got all the quotes, check out Auto Insurance 101: Part 3 ~ What to Do With The Quotes Now That You Have Them, to be published tomorrow. And good luck!

If you liked this article check out the rest of the Auto Insurance 101 Series, and check out ways to Stretch Your Dollar.

Auto Insurance 101: Part 1 ~ Before We Shop Let’s Understand What We Have

The following information is not advice, it’s just my thoughts and opinions. I’m just a girl on the web, not currently licensed in insurance or anything else in any state. You should absolutely seek the counsel of an insurance agent licensed in your state before taking any action at all. Coverages and programs discussed may or may not be available in your state.

I read an interesting article over at Single Guy Money about Auto Insurance. He has some great tips about making sure we’re getting all of the discounts we’re entitled to, and encouraging us to shop around for the best rates.

As a retired insurance agent, I thought I’d give my perspective. In fact, I’d been meaning to do a series on different insurance topics, but I’ve been more interested lately in talking about things like politics, conserving water and my husband’s new computer. But I digress.

This is the first installment of that three part series.

Before we shop around for auto insurance we should make sure we are being charged correctly for our current policy. We want to make sure that our current insurer is rating us correctly, both in our usage of the vehicle and the discounts we’re getting. So, let’s pull out our Declarations Page, call or visit our current insurance agent and ask the following questions:

1. What are my current coverages? Sometimes Declarations Pages aren’t so easy to understand. We not only want to know which coverages we have, we want to know what they do for us.

2. Are any of these coverages possible duplications of coverage I have elsewhere? Although they can’t really answer this question for you, they can help you figure out if you do. Do you have AAA? Then you may not need their coverage. Or their coverage may better suit your need. Have excellent, broad health insurance? Perhaps you don’t need Medical Payments coverage, or perhaps you should keep it if you often transport your friend who has none. Don’t work? Then you might not need the lost wages coverage under your Personal Injury Protection.

3. How do you show me using the vehicle? Is it rated as going to and from work, or for pleasure driving only? Most insurers only ask about your usage of the vehicle when you first take out the policy, so if you’ve had a change in your circumstances (changed jobs, stopped working) then chances are you’re not being rated correctly. Realize, though, that they could be undercharging just as easily as overcharging you.

4. What are my current discounts? Every company has their own discount programs. These discounts are applied after they’ve already given us the base rate. We need to ask them about all of the discounts they offer, and how we qualify. Some common discounts are:

• Multiple Policy – having more than one car insured with the same company
• Multiple Line – having more than one type (auto and homeowners, for example) insurance with the same company
• Accident Free – not having a claim for a specified period of time with that company
• Good Student – typically a 3.0 or higher GPA, usually as a full time student, and only up to a certain age
• Vehicle Discounts – Airbags, alarms, VIN etching
• Defensive Driving Discount – voluntarily taking a defensive driving class
• Age-based discounts – Over 50 , single head of household (my company rated young single parents that lived on their own as if they were over 30 – a huge savings)

Now that we know our policy is rated correctly, let’s get quotes to make some changes. We may or may not make any changes, but let’s make sure we’re getting the most bang for our insurance buck.

1. Get quotes to raise deductibles on any coverage that has one. Find out how much can be saved by going to the next highest deductible. For example, if the current policy has a $250 deductible for Collision, get quotes for $500, and perhaps even $1000. Then weigh the savings against our ability to pay more out of pocket and our risk tolerance. I know lots of people who take high deductibles on everything, take the savings and put it in the bank in a “deductible fund” so the money is there if needed.

2.Get quotes for more and less Bodily Injury and Property Damage liability coverages. Get quotes for at least one step up and one step down from where we are now. For example, if the current liability limits are 50, 000 per person/100,000 per accident get quotes for 25,000/50,000 and 100,000/300,000. If we can double our coverage for, say, $50 more per year – and we have assets enough that we could use that additional protection, would that be worth it?

Okay. Now we’re ready to talk to other insurance companies. That’s the subject of Part 2 of the series, so look for it soon!