In today's recessed economy it can be tough to swallow the possibility of paying more than you need to for anything-especially your auto insurance! With drivers looking for new and creative ways to cut corners everywhere they possibly can, it should come as no surprise to find out that the first place many of them start is with the coverage levels on their insurance policies. Skimming down your coverage to a little closer to liability is the "in" thing to do to save money on your insurance…so why is it a bad idea?
Have you ever seen exactly how high bills can climb after a car accident? As the driver responsible (which is when it really matters whether you have auto insurance or not) you're going to have to pay for:
a) Repairs to your vehicle.
b) Repairs to the vehicle(s) of the other driver(s) involved in the accident.
c) Your medical bills.
d) The medical bills for the other drivers involved in the accident, including:
1) Ambulance transport.
2) Emergency room services.
3) ICU care, if needed (which can go up over $5,000 a day).
4) Hospitalization in a regular room.
5) Pharmaceuticals.
6) Follow-up care with their family physician.
7) In-home care.
8) Long term rehabilitative therapy.
e) Repairs to any storefronts, windows, traffic lights, traffic signs and guardrails unlucky enough to get in the way.
When you start adding all this up it can easily hit six figures or more, which is a whole lot more than you want to pay out of pocket. Remember, even if you have auto insurance coverage and you just drop your coverage levels to lower your premiums you're still going to have to pay for anything over and above the maximum coverage of your policy.
So if you have bodily injury coverage up to $30,000 and the other drivers rack up $300,000 worth of bills, you're going to have to pay $270,000 out of pocket.
Unless you regularly have $300,000 or more lying around it's not a good idea to drop your coverage. Instead, why not look for ways you can trim the fat off your
auto insurance rates? Most insurance companies try to make sure you're getting more for your money by adding plenty of "extras" onto their policy that don't cost you a whole lot more but can make a significant difference between being able to afford your auto insurance and scrambling to pay your bills every month.
Do you currently have rental insurance? What about emergency roadside assistance? Extra medical coverage to help you out with your own medical expenses above and beyond your health insurance? All of that is nice to have (especially when you're in an accident 400 miles from home) but isn't absolutely essential, and cutting these non-essentials can easily bring the cost of your
auto insurance back down into your budget without forcing you to give up the things that really matter.
Like enough liability, comprehensive, collision and uninsured motorist insurance to keep you out of the poorhouse.
