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Why car insurance sucks...

Video car insurance sucks movie

The state makes me buy it, or I can have my car impounded and lose my ability to drive. Is auto insurance really a privilege? I can go without it and enjoy a decent quality of life? Car insurance blows! Here's why:

  1. The State / DMV mandates you have coverage.
  2. It's not cheap. Car Insurance averages $1,000 to $2,000 each year, depending on your State.
  3. Insurance salesman. Nuff said.
  4. Another bill you have to worry about.
  5. The car insurance carrier keeps raising the prices every year.
  6. Insurance policies have high deductibles.
  7. Finance charges.
  8. Low limits.
  9. If you have tickets, accidents or DUI, the premiums are high.
  10. Can prevent you from buying a new car (high premiums).
  11. The insurance carrier takes too long to pay.
  12. The insurer gives you a small amount for your damages, based on "their internal software."
  13. The car insurance company can cancel you.

...and what you can do about it

Now that I've listed all the problems with auto insurance and you probably know most of these yourself, let's discuss some solutions.

  1. The State / DMV mandates you have it (car insurance).
    Most state's give you alternatives to car insurance. Here in California, they allow you to: buy a Surety bond for $35,000 or keep a certain amount, like $35,000 in an escrow account with the DMV in lieu of auto insurance.

  2. It's not cheap. Car Insurance averages $1,000 to $2,000 each year, depending on your state.
    I agree with this one 110%. I could have had a very nice car with the money I paid to insurance companies. But there are some things you can do to reduce your premiums.

  3. Insurance salesman.
    Insurance Agents are extroverts and friendly by nature. I think most really do want to help their customers. Read my article, how to use your insurance agent.

  4. Another bill you have to worry about.
    Set up auto pay or bank draft so you don't have to deal with snail mail.

  5. The car insurance carrier keeps raising the prices every year.
    Insurance companies try and stay competitive, plus figure out how much they can increase their rates and while retaining customers. This is a normal function of business. However, many states (like California) have safe driver discount laws after you've been a customer for 3 years. Check your state laws to make sure you have not been shorted any mandated discounts. You can always vote with your money and find another carrier.

  6. Insurance policies have high deductibles.
    This isn't really a problem, rather a solution. If you have low deductibles, your premiums go up. Keep your deductible at an amount you can come up with, but not too low.

  7. Finance charges.
    Pay annually or semi annually. Or expect to pay 5-10% more to finance your car insurance premium.

  8. Low limits.
    This is the problem of starting with the state minimums. But do not omit needed coverage like uninsured motorist or theft. But it's something we tell you how to do, how to increase your limits.

  9. If you have tickets, accidents or DUI, the premiums are high.
    This can only be fixed over time. After 3 years, most tickets and accidents will fall off your record. Check the DMV to make sure that's happening. DUIs or other offenses will take up to 10 long years to fix.

  10. Can prevent you from buying a new car (high premiums).
    Which means either your income is not high enough, your driving record sucks, you credit is bad or a combination.

  11. The insurance carrier takes too long to pay.
    Most states have laws that require an insurer to pay within a certain number (usually 30) days. If they drag their feet, report them.

  12. The insurance company under estimates your damages.
    This is far more serious than slow paying, is not paying enough. Some insurers have in the past sent paltry settlements in hopes you will agree fast and take the money. Never agree to the first offer. Insurers are for profit businesses which are always looking to make more or their shareholders. If they can reduce your payout, that is more for them. You can always get 3 estimates. Then hire an independent adjuster. Complain to the Department of Insurance. And lastly, hire a lawyer.

  13. The car insurance company can cancel you.
    That usually happens when you fall out of their acceptable customer profile. Tickets, at fault accidents, adding high risk drivers can all lead all lead to having your policy terminated. Unless there was some internal company mistake, you'll have to take appeal the action to either stay with your carrier, or find another one that want's your business. You can also improve your driving record.



Craig J Casey

Written by

Financial Writer helping people with their insurance problems on the net since 1998.

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