Are You Spending Your MoneyWisely on Car Insurance? by Martin Zevin, PA

Are You Spending Your MoneyWisely on Car Insurance?

First of all, I am not an insurance agent. I am an attorney who has been practicing Personal Injury law in Florida for over thirty seven years. I do not sell car insurance.

During my years in practice, I have negotiated settlements for injured clients with almost every insurance company that does business in Florida. As part of my representation, I need to obtain and study the insurance coverages available for my client, the owner and driver of the vehicle in which my client may have been a passenger, as well as the insurance coverage of the driver of the vehicle who was at fault (and the owner of that vehicle if different than the driver).

Many people do not realize that the insurance which covers their own cars may be helping someone else more than it is helping them. For example, when I review the insurance coverage of my client, I often find that there is a much higher amount for bodily injury liability than there is for uninsured motorist coverage. Very often, in an effort to save money, people elect $100,000/$300,000 ($100,000 per person, $300,000 per occurrence) for bodily injury liability, but only $10,000/$20,000 for uninsured motorist. This means that, if the client is at fault for an accident, the other driver can make a claim for up to $100,000 per person without my client having any personal liability; however, if my client is injured by someone else’s negligence, the most that I can obtain as a settlement for my client from his own uninsured motorist coverage is $10,000.

Therefore, the first thing that you should do in reviewing your car insurance is to be sure that you have at least the same amount of uninsured motorist coverage as bodily injury liability coverage. Do not try to save money by electing a lesser amount of uninsured motorist coverage; you are going to end up regretting your decision if you are injured in an accident which is someone else’s fault. Uninsured motorist coverage is the most important coverage you can have in Florida because it protects you not only from drivers who have no bodily liability coverage, but also from those who do not have enough coverage to compensate you for your injuries and your pain and suffering. In addition, if you own more than one vehicle, always elect to “stack” the uninsured motorist coverage. It is very inexpensive to do so. If you have two cars, it doubles your uninsured motorist coverage; for three cars, it triples the coverage. This gives you much more protection for a very low additional premium.

If you want to save money on your car insurance premium, look carefully at your deductible for your collision coverage. In reviewing policies for my clients, I notice many people are paying a substantial portion of their premium to cover damages for an older car and are electing a relatively low deductible (between $100.00 and $500.00). Let’s assume that you have a car that is ten years old. You are paying a total premium of $1,200.00 every six months. Of that amount, $400.00 is going for the collision coverage with a deductible of $500.00. One day, you back out of your driveway and hit a tree. This results in $800.00 of damage to your bumper. Are you really going to put in a claim to your insurance company for the $800.00 repair minus the $500.00 deductible, resulting in a net claim of $300.00 reimbursement to you? I strongly recommend against doing so, because you will then have a claim against your record for negligent driving. This will not only be likely to result in an increased premium the next time your coverage comes due, but also be a negative claim against you for all future car insurance coverage. Therefore, it is unadvisable to make a collision claim unless your damage is very substantial. For a ten year old car, it is also likely that a serious collision will result in your car being totaled, since the costs to repair the car would be more than 75% of its replacement value. My recommendation for collision coverage is to elect a deductible of $1,000 for newer cars and to consider eliminating collision coverage completely for older cars. Remember, if it is the other driver’s fault, he is required to have property damage liability insurance of at least $10,000 to cover repairs to your vehicle. It is much wiser to spend the money that you will be saving by eliminating collision coverage and put it toward increasing your uninsured motorist coverage, which is protecting yourself rather than your car.

It is also very important to shop around at least on a yearly basis for the best car insurance rates. There is a huge range of premiums for covering the same car, the same insured and the same amount of coverage. I offer all clients a free consultation to review their car insurance in detail and recommend changes. I also provide a list of several insurance companies that I consider to be reasonable and even generous, based on my experience in settling personal injury claims with those companies, including PIP claims for payment of medical bills and lost wages, as well as uninsured motorist claims. Just because a company is cheaper does not necessarily make them better. Just because you may see a company advertising on television on a regular basis does not mean that you will be treated well by that company if you need to make a claim. Just because you have been a loyal customer of an insurance company (I often have clients tell me “I’ve been with blank company for over twenty years”) does not mean that you will be treated any differently than someone who has been with that company for only a month. Once you make a claim, you will be assigned an adjuster who knows nothing about you other than your claim number. Your insurance agent will have nothing at all to do with processing your claim.

Please feel free to call me for a free personal or phone consultation regarding any issues pertaining to personal injury claims and car insurance coverage. Even if you have not been injured, I will be happy to provide you a free consultation to review your car insurance and recommend insurance companies to contact for free quotes.