Most individuals are pre-conditioned that the expensive is better. Just like in clothing apparels, signature clothes and haute couture that are not cheap are preferred by people because of the quality and prestige of the brand. Who wouldn’t like to don a Gucci, Channel or Calvin Klein clothes?
Nonetheless life is not always a bed of roses. In hard times, more people find ways on how to cut their expenses. Expensive is not always the best when it comes to meeting the monthly dues. The economic recession forced people to look for cheaper goods and services and to forego the “better” things in life.
Is there then such a thing as car insurance overspending? According to research, many people are guilty of committing this act. Many people are paying more than what is needed. Sure, such is meant to protect policyholders from future financial loss because of accidents, car thefts, or totaled cars but as consumers they must make sure that they are getting what they really or only need and not pay for extras.
They must make informed choices and not be passive. They should put in mind that they are the ones paying and that the companies are the ones hungry for revenue. Sure, good companies exist but every business is geared towards accumulating profit. Agents may persuade individuals to add extra coverage that they may not be using in the end.
Consumers must not fall into the trap of overspending. One step is to identify what they truly really need. They can only do this if they take time understanding the various types of coverage and the minimum required coverage in their state. Here is a quick run-down:
- Liability Coverage-the most basic coverage that will cover property damages
- Personal Injury Protection-is inclusive of medical expenses to both parties no matter who is at fault in the accident
- Collision-includes repairs and replacements due to collision
- Bodily Coverage-covers the other party’s injuries
- Comprehensive Coverage-takes charge of car damages due to theft and natural causes except collision
- Property Damage-pays out for damage done to properties
- Medical Coverage-covers medical bills and even funeral expenses for both driver and passengers
Purchasers need to check out the factors that affect rates such as age, driving history, claims’ history, credit score, driving experience, type of car driven, geographical location, mileage and civil status. They must likewise be mindful of discounts and how to avail of them.
Another way to avoid overspending is to compare rates from different companies. Check out for quotes from several companies registered in state and avoid the painstaking process of talking with several agents.
Going online is a very easy and quick process in comparing a variety of policies. Individuals can even purchase insurance online. Other companies give discounts to people who purchase through the Internet.
Be a wise shopper. Do not fall for extraordinary offers. Always read the policy before finally signing it.
Underinsured and over insured are both detrimental to one’s financial health. In this information age, the value of information is seen in every corner of life.