A Little Insurance Advice

My car got broken into last week (more on that later…) but I realized some things after talking with my insurance company.

Now, for those of you who don’t know already, chances are your house insurance covers your possessions which are stolen from inside your car, whereas your car insurance covers the ACTUAL car.

Now that we have that out of the way, when I was talking with the representative from my home insurance company she asked the fateful question “Well, have you thought about having your car insurance through us as well?“.

Of course I have. But I could get it for $50/mth cheaper at another company so I opted for that.

But she left me something to think about.

“Well don’t forget that in a case like this, you would only have to pay ONE deductible to cover both your car damage as well as your possessions which were stolen, but with two separate insurance providers you will have to pay both deductibles.“

Hmm…this was a very, very excellent point that I had never thought of.

Let’s be honest here…I was never one to really think about my insurance. I was more of the ‘Give me the lowest quote you can which covers what I want and you have a client.” I’m sure there are a lot of you out there.

Here are the things that are crawling through my mind right now in terms of insurance:

• Deductibles – You know, I had a $500 deductible for my home insurance but that really doesn’t help out your cause if you don’t have $500 worth of possessions that are stolen. Sure, there would be extreme examples such as your entire house burns down, but take a look at your specific case of a vehicle. You would have to have a lot of big ticket items stolen out of your car to warrant paying $500 to get them back. Off the top of my head, I am thinking a laptop, some high end stereo equipment or about 25 CDs. Maybe some tools? I could go on with hypotheticals but the case in point here is – You should have your deductible be worth your while. I have just put in a request to ask for a lower deductible. I am going to make an assumption (and someone can provide me with the correct information at any time) that the lower the deductible, the higher you will pay in a monthly fee. Am I correct? Why else would they have different levels of deductibles? I’m sure EVERYONE would LOVE to have the lowest deductible available. So now it becomes a cost comparison. If I opt for the $300 deductible, how much more a year is that in monthly payments? If it is extremely more, then it probably isn’t worth it. But if it’s only $50 more, then you are laughing. Feel free to throw any other information that can be good when looking at insurance.

• Combining insurance – Here’s another classic example of cost comparison. Even if my car insurance company comes backs and indicates that by combining my house insurance it would cost me more than the other house insurance provider – I have to compare the case of how much the two deductibles would cost together, as well as the gamble I wish to put on that instance happening. I am going to say right now that Palmer feels his car has a greater chance of getting broken into then his own house. This factors in some variables such as the area I live in as well as the area I usually park my car. So in my case, I am thinking it’s probably worth my while to combine the two even if it will come out a little extra…

• But in the end of it all, what’s your insurance there for anyhow? We all know the classic curse – “Claim something and your premiums MAY go up!“. Krista brought up some good points at lunch today saying that the reason she has the $500 deductible is that it lowers her premiums and the odds are that she would rather shell out the cash out of her own pocket under $500 to fix something rather than make a claim and have her premiums go up. One can assume that people choosing the higher deductible are banking on worst-case scenarios (aka you total your car or your house burns down).

There’s a heck of a lot of factors to ponder when thinking about insurance. I think at the very least I am going to look at combining my insurance into one company in the case that if I do have to pay a deductible, then it’s just a one-shot deal.

Stay tuned for more info. Share some thoughts in the comments section! I’m sure everyone has their own views on insurance.

Oh yeah, if you’re one of those people out there that don’t have insurance. Don’t be left out in the cold like Cameron who’s girlfriend torched his house and all he had left were the clothes on his back, his cat and his Jeep. That’s just plain dumb.