Reviewing Your Car Insurance Coverage: Are You Carrying More Insurance Than You Need?

You may not be able to avoid paying for car insurance all together, but you can certainly avoid paying for more car insurance coverage than you actually need. Unfortunately, if you are like many people, you may not even realize that you have unnecessary or excessive coverage. That is why it is so important to take the time to review your coverage options at least once a year and make any necessary changes before renewing your policy. Below you will learn more about some of the things you should be looking for when reviewing these coverage options so that you can determine whether or not you have more insurance than you truly need.

Duplicate Coverage

One of the most common ways in which people carry too much auto insurance coverage is in the way of duplicate coverage. If you are in an auto accident, you will only be able to collect compensation for each aspect of your collision needs from a single source. For instance, if you require a rental car while your vehicle is being fixed, you will only be able to file a claim for rental car charges with one company. Consequently, if you have rental car coverage through both your roadside assistance program and your car insurance carrier, you are paying for duplicate coverage that you cannot use.

When checking your auto insurance policy for duplicate coverage, be sure to think outside the box. For example, while you may not typically think of your credit card company as someone who provides you with insurance coverage, the truth is, many companies will offer a wide variety of protections as part of their attempt to attract customers. These protections often include things such as rental car coverage.

Excessive Coverage

In addition to paying for duplicate coverage, you may find that you are also carrying excessive or unnecessary coverage. For instance, if you are currently carrying collision insurance, you may find that this coverage is no longer cost effective. This is because collision coverage will never provide a payout that exceeds the value of your vehicle. Anytime the cost of repairing your vehicle exceeds its fair market value, the insurance company will simply declare the vehicle a total loss and issue a check for the resale value of the vehicle. Consequently, if the cost of carrying collision coverage exceeds the possible payout you could receive, continuing to carry this coverage will simply be a waste of money.

Over the years, the resale value of your vehicle will drop considerably despite your best efforts to keep the car looking and driving perfectly. This is because all vehicles are subject to depreciation. In fact, during the first three years of your life, your vehicle will depreciate at a rate of about 15% per year. If you are not adjusting your coverage each year to reflect the new value of your vehicle, you are paying too much for car insurance. To learn more, speak with someone about insurance in Saint John.

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