Mistake #5: Buying gap coverage from your car dealer, bank, or credit union
Today, we’re going to cover Insurance Mistake #5 in our 10-part series.
As defined by the Insurance Information Institute1, “gap insurance covers the difference between what a vehicle is currently worth (which your standard insurance will pay) and the amount you actually owe on it,” “in the event of an accident in which you’ve badly damaged or totaled your car.”
Typically, insurance agents can provide that coverage for less than 25% of the cost of a car dealer, bank, or credit union. If you purchase a new car and finance the full cost or put very little money down, you definitely need gap coverage. The cost to add the coverage to your auto policy is around $22 to $25 per six months. You will typically only need gap coverage for 3 years or less if you don’t finance for over 72 months. So, the math on it would be:
$50 X 3 years = $150 to have the gap coverage.
A dealer, on the other hand, would typically charge at least $600 for gap coverage. Once you don’t need the gap insurance, you can take it off of your auto policy. Save yourself some money and buy gap coverage through your insurance agent to pay off the difference between the loan and the value of your car in the event of a total loss.
Source:
1. https://www.iii.org/article/what-gap-insurance
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The Rosburg and Associates Insurance team is trusted throughout the community and is committed to providing you with the attention and high-quality experience you deserve. To speak directly with a team member, simply call or feel free to utilize any of the interactive tools offered throughout the site.
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Don’t make the mistake of buying a vehicle before looking into the cost of auto insurance.
Are you looking to buy a vehicle for yourself or a family member? One of the most common insurance mistakes is buying a vehicle before looking into the cost of insurance. The type of vehicle can have a major impact on the cost of insurance. Many people look at the cost of the car and their payment but don’t put any forethought into what the insurance cost will be. This is a really important consideration for young drivers under the age of 25. We would recommend you make a list of 3 or 4 models of vehicles you are considering and check them first on the Insurance Institute for Highway Safety crash rating.
Safety Rating
Typically, if they are a highly rated vehicle, ideally with 5 stars, the insurance costs will be favorable compared to other models with lower ratings. I have a teenager getting ready to turn 16, and we are only looking at used cars with the 5-star crash rating. Once you have your list, you should reach out to your insurance agent and check the costs of each vehicle. This will give you the total cost for each vehicle you are looking at and will help you factor this information into your buying decision.
Purchasing a vehicle is a big decision to make, and we know that your family’s safety is of utmost importance. For more information about auto insurance, click here.
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The Rosburg and Associates Insurance team is trusted throughout the community and is committed to providing you with the attention and high-quality experience you deserve. To speak directly with a team member, simply call or feel free to utilize any of the interactive tools offered throughout the site.
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Auto Insurance is designed to protect you and others driving around you when accidents occur. We have found that many people don’t understand the magnitude or consequences of being involved in an injury-related auto accident.
Carrying low liability limits and low deductibles on your automobile insurance
We have all witnessed increasing medical costs and the cost of vehicles in recent years. We are legally liable if we have caused or have been deemed to be at fault when an accident occurs. If an at-fault accident occurs, and the other party goes to the hospital and medical treatment is necessary, chances are the majority of people in Oklahoma do not have sufficient insurance to cover Bodily Injury (medical bills, loss of income, pain, and suffering, etc). For example, if you have $50,000 per person/$100,000 per accident and injured someone that will require surgery, rehab, and time off of work, you likely do not have enough coverage.
Also, if you have been involved in an at-fault accident with a late model vehicle/vehicles and that vehicle is a total loss, minimum coverage will likely not be sufficient. For most situations, it makes sense to carry higher liability limits and higher comprehensive and collision deductibles. For example, if you currently carry $250 deductibles on comprehensive and collision it may be a better use of your premium dollars for asset protection to increase your deductibles to $500 or $1,000 and increase your bodily injury liability and property damage liability.
Find out what level of coverage you need
If you had an accident and had to come up with an additional $500 that would likely not change your financial situation. If you hit and injured someone and they had $150,000 of medical bills, rehabilitation, and loss of income and you only had $50,000 of insurance (therefore you have $100,000 liability), that would likely be devastating financially.
You should discuss these scenarios with your agent and look at your income, assets, and exposures to determine an appropriate level of bodily injury and property damage coverage for your situation. Feel free to reach out to me with any questions. My goal is to help you may wise decisions regarding your insurance protection.
Contact Us
The Rosburg and Associates Insurance team is trusted throughout the community and is committed to providing you with the attention and high-quality experience you deserve. To speak directly with a team member, simply call or feel free to utilize any of the interactive tools offered throughout the site.
The post Avoid This Common Auto Insurance Mistake appeared first on Rosburg & Associates.
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