Car Insurance 101 – The Importance of the Annual Insurance Checkup

Few people look forward to shopping for insurance, and once that coverage is in place there is a strong temptation to simply leave it as is. But that set it and forget it approach can be a big mistake. Insurance needs change over time, and it is important for everyone to take a look at their own insurance needs to make sure those life, health, home and car insurance policies are still providing adequate coverage and protection.

Reviewing your insurance coverage, including your car insurance policies, on a regular basis is a great way to save money and gain peace of mind. If the results of your assessment show that you do not need to make any changes you will have the satisfaction that comes with knowing that you are well protected. If on the other hand you find gaps in your coverage you will be able to address those shortcomings and avoid problems down the road.

Check the Cost of Coverage

When you first purchased automobile insurance you no doubt shopped around – comparing premium rates and coverage levels for every insurer you could find. But since then you may have assumed that the company you are insured with will always have the lowest price in town. That may or may not be true – but the only way to know for sure is to check the rates offered by competitors.

Is it Time to Drop Collision Coverage?

The annual insurance review also gives you a chance to determine whether or not it still makes sense to carry comprehensive and collision coverage on your vehicle. If the value of the car you drive has dipped below $3,500 it may not be prudent to carry full coverage. You may be better off dropping that coverage and stashing the premium savings into an emergency fund. Your current policy should break out the cost of collision coverage, so it will be easy to see how much you could save. If you have the fiscal discipline it takes to funnel the money you save into a special account you can self-insure and cover the cost of repairing or replacing your car in the event of a total loss.

Reviewing your insurance coverage may not be fun, but it is certainly important. Taking the time to do an annual review of all your insurance coverage can yield significant cost savings and give you the peace of mind that comes with knowing you are well protected.

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