Article 133 Financial Tune-Up - Part 8a Home and Auto Insurance Check-Up
Introduction
Financial tune-up, when done right, will have as part of the process the need to find hidden savings in home and auto insurance. This is an essential part because shopping for the best insurance deals will help with debt reduction, wealth building and retirement planning. That is why it is so important to check up your home and auto insurance.
Get Quotes To Check Up Your Home and Auto Insurance
It will be ridiculous not to do comparison shopping for auto insurance where you could save as much as 10% or even more. Don’t lower your level of coverage though. We just want the best price for the coverage we can live with. How do we do it? I thought you’d never ask.
There are four websites that can help you with this. Go to NetQuote.com and InsWeb.com. I am sorry not to make the websites clickable but article directories don’t like links. Anyway there are links at the end of the article. Scroll down for over there, you will find and compare quotes from different home and auto insurance companies. Both Progressive and Geico have advertisements on TV practically every day. You can go to their websites to get their quotes.
Raise Insurance Deductibles
Some insure their autos with low deductibles like $300. The trouble with this is that, you may be tempted to make claims for small items. When you do this a few times, the insurance company could raise your premium or just refuse to cover you when the time to renew comes along. On the other hand, raising the deductible to $1000 could net you a saving of around 10%.
Call the insurance company that is the holder of your current policy and request for a new quote based on the higher deductible. Make sure though you have enough emergency fund to cover any untoward expenses to cover the deductible cost.
Insurance Check-up to Suit Needs and Change
We know it is boring to have to go through all the policies that insure all your properties. Besides, it is written in a language all its own and there may be some legal lingo there that could trap the unwary who will learn only the implications after the fact, that is making a claim after something happens.
The trouble is, this is something that has got to be done. If we don’t do this annually, how will we know if we have adequate coverage? Besides this annual check-up, the recommendation is to get new bids or quotes from other insurance companies every three years. Why is this step necessary?
Well, business change for one thing and our needs change too. The business change may offer opportunities to add more coverage. Besides, you may be able to save money. Be careful with this though. The savings you make may mean you are giving up something. It is good to ask what you lose for the savings you are getting.
That is why it is important to read the fine print. You don’t want to be in a car accident where you can not afford to pay for the repairs. Then there is the coverage for the teenagers in the family. Your rates could go up although there will be a discount after they leave for college. Those who work at home and therefore drive less are also qualified for discounts.
Does your policy include coverage for uninsured motorists? This is pretty expensive because it protects against motorists who do not have insurance. In California one of four motorists is not insured while in New York, one of every seven motorists is not insured. Can you imagine if one of these people crashes into your car?
To determine how much liability coverage to get depends on where you live, lifestyle, net worth and public standing. For example, the five areas where lawsuits favour the plaintiffs are West Virginia, South Florida, New Mexico, greater Chicago and New Jersey.
If you are entertaining at home and have underage drivers, you will be responsible for accidents or injuries they cause. When someone is injured, the liability could be in the range of $300,000 and half a million dollars and could easily rise to a million bucks.
Conclusion
There you have the basic insurance for home and auto and how to make sure you get the best deal. But is this enough? While it is not often that the extreme happens that could lead to financial ruin, it is best to check out the option of the umbrella coverage which we will cover on the next article that will prevent one from getting the unthinkable. Anyway, it is all part of the <B>financial tune-up</B>.
Your Turn
How about you? Were you ever able to save on your home and auto insurance? Tell us all about it in the contact form below. I will love to publish it in your name so other people will benefit from it.
By Roger Guzman, M.D. and Evelyn Guzman
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