Do you know how much your auto insurance policy weighs? Of course not. You can't sit around and actually weigh the value of a policy. (Unless you're weighing the amount of paper it takes to print it, in which case your policy is probably morbidly obese!) Because they can't weigh it most people have no idea how much fat is actually in their auto insurance policy, and what they can do to make their coverage into a lean, mean, accident fighting machine.
The first thing you need to do when you're weighing the fat in your auto insurance policy is take a look at how many "perks" you have included in your coverage. Do you have emergency roadside assistance? What about renter's insurance? These types of perks get gobbled up by consumers every year like a turkey on Thanksgiving because of their perceived value; however, you might be paying more than you really need to. How much is your emergency roadside assistance service costing you every year? Chances are, AAA can provide the same services for under $100. Do you really need renter's insurance, or can you put $500-600 away in a savings account "just in case" and call it a day?
What about life insurance? Medical insurance? Cutting out the perks you don't really need is the first step in helping your auto insurance policy trim the fat.
The next thing you need to look at are your policy limits-and what type of coverage you have. How much liability insurance do you have? Liability auto insurance is required from coast to coast, and each state has their own minimum limits. If you live in a state where the maximum liability required is less than $100,000 you might not be adequately insured if you're involved in an accident involving more than one other vehicle. While small towns aren't usually prone to ten car pile-ups it's not hard to start a domino effect by rear ending a car a red light.
At $2,000 a pop (minimum) those repairs aren't going to come cheap-and when you factor in their medical bills, their passengers' medical treatment and those of any bystanders (which won't be much for a fender bender but can add up quickly if you hit them head on) it's easy to see why $50,000 in liability auto insurance just doesn't go as far as it used to. Most experts recommend that you carry a minimum of $100,000 to $500,000 liability insurance on your vehicle.
Do you have comprehensive and/or collision coverage? No, these two aren't excess fat. As a matter of fact, they're a vital part of helping your policy stay healthy. Think of them as the vitamins of the auto insurance industry, helping your policy "pump it up". Comprehensive auto insurance protects your car from wind, rain, dark of night and Geico squirrels (to name a few), while collision coverage will pick up the bill for YOUR repairs after you've been in an accident. The two combined can save you thousands of dollars in repair and replacement costs.
Trimming the fat on your auto insurance policy and filling it up with the coverage you need will go a long way toward turning it into the top notch accident protection tool your car deserves.
