Auto more than a rate

Are Claims Preventing You From Finding Affordable Auto Insurance Quotes?

I’ll admit, currently, mine and Kelly’s auto insurance is dirt cheap. We’ve had no claims since January of 2008. Not a windshield chip, not a tow, not anything! Don’t get me wrong, I’ve had windshield chips, even a big crack, but I don’t put that on my insurance. I don’t even have towing on my policy. 

I even have the highest limits available. My deductibles are at $1,000 but as you just read, I don’t use them anyway. $500 deductibles are overrated. You’ll also find that there’s no rental reimbursement. I don’t need that. I’m not having accidents. Why do I need rental reimbursement if I’m not ever using a rental car. I’ve saved plenty of money over the years by not having those additional coverages. I can use that savings and pay out of pocket if need be. But there hasn’t been a need.

However, if you’re like my good friend Kim (that’s not her real name), and you have 2 at-fault auto claims in the last 3 years… you most likely won’t find what I consider an affordable auto insurance rate.

Kim called recently, very discouraged. Her auto insurance has jumped to $350 a month. At one time she was paying a little over $100/month. She has 2 cars, neither are sporty (not high premium cars like a convertible might be), and no youthful drivers. Oh no! Her son isn’t that far away from driving, maybe a couple years… that’s gonna hurt! But her claims are killing her pocket book.

I didn’t know how to explain it. I mean, I did, but we don’t want to hear how insurance companies need to make money. Our subconscious thinks they should barely charge us for anything, and then when we have ONE accident – “why are they going up on me?” 

Let me get a little deeper into Kim’s situation. Her 2 claims in the last 3 years have paid out a total of $52,791.46.

Do I need to say that a little louder? FIFTY.TWO.THOUSAND.DOLLARS!

Kim’s exact words, “They’re breaking me, Nick. I can’t afford that kind of premium.”

The truth of the matter is that Kim wouldn’t have been able to pay out $52,000. $350/month is a piece of cake compared to what her auto insurance has paid on her behalf. Paying out-of-pocket the $52,000 would have broke her, if she had it to pay.

Let’s do the math. Worst case scenario is those claims haunt her for 5 years (probably 3, but let’s say 5). If her rate were to increase to $400/month before it’s all said and done, that’s $400 x 60 (5 years x 12 months). She’ll pay the auto insurance company a total of $24,000 over 5 years.

There is a very good chance Kim’s auto insurance company will never make money off of her. But that’s what we want isn’t it?

There’s a good possibility Kim will be shopping her insurance in the days ahead. I can’t say I blame her, but I know the outcome. With 2 claims in the last 3 years totaling $52,791.46 – she needs alot of luck finding affordable auto insurance quotes.

Sure, it’s easy for me to say, I’m paying less than $100/month for full coverage on 2 vehicles. My day is coming. Sean and RyRo will be driving soon. Sean in 5 years, and RyRo in 7 years. But I currently don’t have any claims, and I’m very happy paying for my auto insurance. Kim’s situation shows us exactly what auto insurance is for. She could be out over $50,000 if not for insurance. Instead, she’ll be out less than half that. LESS.THAN.HALF.

Kim’s close to my age, and probably has good credit. I would bet she’d be paying less than what I’m paying if only she had no claims.

But Nick, that’s what insurance is for.

You’re right. My recommendation is to compare your premium payments with the amount of the claim. My deductible is $1,000 and I wouldn’t make a claim that’s under $2,000. If you’ve had claims, figure up what you’re paying and what your auto insurance company paid. If you’re considering a claim, or if you have one in the future, do the same math. This will help you be more aware of what you’re getting into.

This is why I don’t make windshield chip claims, or towing claims, or anything minor. I’m making small deposits to my auto insurance company in case the day comes where I have to make a large withdraw.

Kim made this bed, and now she has to sleep in it.

My hope is that you’ve learned something, and you’ll make your bed differently.

My name is Nick, and I’m an owner here at The Gann Agency. I feel compelled to speak truth into your life when it comes to insurance. I won’t tell you what you want to hear, but I’ll tell you what you need to hear.

Finding affordable auto insurance quotes is much easier if you’re an affordable driver. What are you doing to be affordable?