San Diego: 4 Reasons Not to Buy Bargain-Rate Insurance
Times are tough and consumers want to get the best price they can. Whether it's buying a car, shopping for gasoline, or even shopping for insurance, we want to save money.
The insurance companies know this. All you have to do is look at their advertisements. Whether it is the cashier in an insurance grocery store who shows you how much you save, or the actor who plays the President on 24 promising you a safe-driver discount, the message is clear: our company will save you money because that is what is important when you buy insurance.
But wait!
Before you run out to find the cheapest insurance policy that will get you out on the road, think about why you should spend a little more money on a better policy.
Here are 4 key reasons.
1. You Get What You Pay For. Welcome to the oldest adage there is. Like most things, cheap insurance is cheap because you're not buying much protection. In fact, in many cases, you're buying just enough insurance to get you out on the road but not enough to truly protect you.
In all states, insurance is required to drive a car on the road and those policies must meet minimum standards, called minimum policy limits. These limits vary from state to state, but in California, those limits are $15,000/$30,000/$5,000.
What do those limits mean? The amounts--in sequence--reference the maximum coverage for bodily injury damage per person, bodily injury damage per accident, and property damage coverage per accident. These amounts only pertain to your liability to another person for damages caused when you are at fault.
As you can see by this chart, California's minimum policy limits are very small compared to other states. Most states require $25,000 of coverage for bodily injuries to one person and $50,000 per accident. California's limit provides 40% less coverage.
While $15,000 may have been adequate 10 or even 20 years ago to pay for the bodily injury in many cases, it is increasingly becoming an inadequate amount with rising health care costs and inflation. Also, many car accidents exceed $5,000 in property damage. Remember that if your liability insurance is not enough to pay for the injuries covered by your negligence, the injury victim will start looking toward your house, your paycheck, and your assets to pay for their injuries. Don't be caught with minimum policy limits.
2. Cheap Insurance Policies Do Not Provide Uninsured/Underinsured Motorist Coverage. The absolute most important insurance coverage--other than liability coverage--is uninsured/underinsured motorist coverage (UM/UIM). This is particularly true in San Diego. The number of drivers in San Diego County who are driving illegally without insurance at all, or with very little insurance coverage, is exceptionally high. UM/UIM provides you with protection when you are hit by one of these drivers and are injured.
But cheap policies do not include UM/UIM coverage. It is not required by law. But it should be.
The Jurewitz Law Group recommends to everyone that you purchase as much UM/UIM coverage as you can afford. It's very cheap to add to your policy and there is no excuse not to have it. The down side is that the limit for UM/UIM coverage is the limit of your liability coverage, and liability coverage is the major cost component for insurance.
We have seen numerous cases where uninsured motorists inflicted damages exceeding $100,000--leaving the victim without remedy. We have seen the same thing occur when the negligent driver only had a $15,000 insurance policy, leaving the injured person with thousands of dollars in unpaid medical bills.
Be sure to add UM/UIM coverage.
3. Cheap Insurance Policies Do Not Provide for Med-Pay. Another useful additional coverage not included in cheap insurance policies is med-pay benefits. These benefits are paid to anyone injured in an accident, regardless of fault. With many people living without health insurance, this benefit is extremely valuable. But it is not included in the cheap insurance policies.
4. Cheap Insurance Policies Do Not Protect You When Liability is in Dispute. Here is a typical situation: client is involved in a multi-car accident where he is not at fault but one or both of the other drivers' is at fault. The insurance companies for the other drivers yell and scream and dispute that they are responsible to pay for the client's damages. While they are in dispute, no payments are made to the client for their damages. And this goes on for months.
Cheap insurance policies are liability only. They do not provide protection and benefits when the at-fault driver's insurance company refuses to pay. How do you get your car repaired? How do you obtain a rental car? How are your medical bills getting paid?
Your insurance policy needs to address this situation. You need to have property damage coverage that pays for your vehicle during these disputes and provides rental car coverage too.
