Why I'm Paying Extra Than Obligatory for My Auto Insurance – Motley Idiot
With a lot of the purchases I make, my focus is on saving as much money as possible. However, this does not apply to car insurance. In fact, I pay much higher premiums for my auto insurance than necessary.
There are two main reasons for this.
1. I have more than the minimum coverage
To find out how much auto insurance coverage I need, it's important to note that the state I live in doesn't have too many requirements. As a result, if I were to buy the minimal auto insurance coverage my state requires, I would have very little coverage – but very affordable premiums.
I choose not to do that. Instead of just buying the minimum coverage I need, I buy additional protection that isn't needed at all, like collision and fully comprehensive insurance. I also set the maximum coverage limits for my policy well above the amount my state requires. That means I have more types of coverage than I need and my insurer may be able to pay out more money for each insured event.
I do this because I would rather pay extra premiums to protect my assets and transfer the risk of large financial losses to my auto insurance.
2. I prefer customer service to affordable rewards
There is one more important reason why I am paying a higher price for my auto insurance premiums than necessary. I looked around and got several auto insurance quotes before buying the coverage, but I chose not to choose the cheapest auto insurance company to buy my policy from. That's because the insurer who offered me the lowest rates didn't have a good reputation for customer service and efficient claims handling.
I've been involved in car accidents before and my insurance has fought on my behalf to make sure the other driver is held accountable. That way I didn't have any unnecessary expenses. I know that in the event of an accident, having an insurer who has a reputation for looking after their customers is vital.
Even after the accident, my insurance made it very easy for me to get a rental car and quickly issued a check to buy a replacement vehicle. It also paid a fair price for my totaled car.
When motorists are involved in an accident, the aftermath of the accident can be a really stressful time. I never want to argue with an insurance company again or have to wait months to get my repairs or my replacement vehicle so I can get back on the road. So it definitely pays off for me to pay higher premiums to get a policy from an insurer with a world-class reputation than one that has not looked after its customers well in the past.
The bottom line is that there are some situations where it makes sense to shop for price alone – but I don't think buying auto insurance is one of them. This insurance offers an important protection against losses that can occur in difficult situations. It pays off for me to protect myself and my assets as well as possible in the event that something goes wrong.