Auto Policy Coverage Questions

[kanagnostos]

How do I know when I can get rid of Auto Loan/Lease Coverage? I believe this is otherwise known as gap insurance. I purchased a new 2011 Mazda 3 several years ago and was told that because of depreciation I could owe more on the vehicle than it was worth. Today I used Edmunds to calculate an approximate value for my car. I came up with around 11K - 12K. However, I owe less than that on my loan. Can I cancel this coverage?

I also have Roadside Rescue Assistance included in my policy. I have AAA too. Is this redundant? If so, I assume I would cancel AAA since the Roadside Rescue Assistance is included in my comprehensive.

My Bodily Injury, Uninsured and Underinsured Motorist coverage is 500/500. I was comparing prices on GEICO and Progressive, which are approximately $40 less per month than my current coverage, and I noticed that the maximum offered is 250/500. When I commented on this to my insurance agent, his response was that in our state the Wrongful Death limit is $500,000 and that I would be leaving myself a substantial gap in coverage if a claim occurred. So why is the maximum coverage provided by GEICO and Progressive 250/500?

Thanks for your help!

 

[VolAgent]

These sound like great questions for your agent.

 

[kanagnostos]

These sound like great questions for your agent.

My agent is first and foremost a salesman, and I would like to go into a conversation with a little more knowledge about the issues I mentioned. I understand if you feel unable/disinclined to answer my questions. Maybe someone else can help...

 

[VolAgent]

My agent is first and foremost a salesman, and I would like to go into a conversation with a little more knowledge about the issues I mentioned. I understand if you feel unable/disinclined to answer my questions. Maybe someone else can help...

And we aren't?

Insurance is all about trust. If you don't trust your agent, you need to find a new one, period.

It is pure idiocy to work with an agent you don't trust. There are simply too many other agents to work with.

 

[BigIVU]

Why are you with what you believe to be an unknowledgable agent?

Why are the other policies cheaper? Is it possibly because they provide inferior coverage to your current policy or the insurers use more restrictive claims practices?

 

[Douggiefresh]

I'm an independent agent myself in multiple states and I have some companies that go up to 1,000,000/1,000,000 while another company will only do 100/300 in the same state. Generally, the higher coverages mean that a company is more willing to take on preferred drivers. These drivers have numerous assets to protect, multiple houses, etc. that someone could come after in case of an accident. That's the only reason why I would personally opt for higher coverages - if you have $500,000 worth of assets to protect, sure go that high. Otherwise your agent is just making a nice commission off of you. The standard coverage I offer for a homeowner is 100/300 and for someone that's renting, either 25/50 or 50/100 (unless they want more).

Roadside assistance on your policy is generally very cheap (like $1-2 per month) but I would see exactly what it covers. If you need something extensive, AAA might cover whereas your roadside on your policy might not. But I don't see why you'd pay for AAA if you have roadside.

Lastly, I don't think you'd have a substantial gap in coverage at $250,000/$500,000. Hell man, that's really high coverage.

 

[BigIVU]

Protecting assets and income is one reason to buy high limits. Depending on the judgment and legal venue, you could face 20 years of significant wage garnishment. A young person negligently ran a stop sign, t-boning a car and killing a pregnant woman and making her teenage daughter a quadriplegic to be taken care of by her father for as long as she lives. The result for the negligent person was decades of financial ruin.

More important was what he did to the family that were victims of his negligence. Does he not have some moral obligation to protect others from his negligence? While recognizing the financial constraints that exist for many people, the less you have in assets, perhaps the more you need in liability insurance. Bill Gates doesn't need auto and umbrella policies. Most people do. Yet they often spend more on lottery tickets than insurance.

My son is a 25 year old millennial. He has $1.5M in liability insurance. The additional monthly cost above the premium for minimum auto limits is about 50 bucks. He understands the financial and ethical value of giving up a weekly pizza to protect himself and others. It helps that he knows a former schoolmate who killed someone while speeding in heavy traffic and has been paying for it for 8 years already while living paycheck to paycheck.

 

[INSUREGEEK]

In answer to OP's questions:

Gap - it all depends. It's usually very cheap coverage and often now included in some bundle endorsement with a bunch of other things you want to keep. If you can delete just the gap, and feel comfortable doing so, then go ahead. I doubt it saves you much.

Roadside - it depends on what AAA plan you're on. Some limit the number of tows and/or add mileage and other fees that you have to pay....fees that the insurance roadside may pay. This is also a very inexpensive add-on to your car insurance that might be built into a broader bundle coverage endorsement you can't simply delete.

UM/UI - Read what BigIVU wrote. I always told my clients to buy as much laibility limit as they could afford. Since you're essentially protecting yourself here, go that route. If a 250/500 plan works for you, please make sure you also look at an Umbrella policy that lets you include UM/UI. Some states and some carriers don't offer it that way.

Lastly, from a body shop owner, please do make sure you've maxed out your Rental Car coverage. Around here $25/day won't get you much more than a go-cart.

Call your agent. He'll know what he sold you....what you can and can't do....and help you decide what makes sense for you.

Good Luck!

 

[biggies]

your question needs a lot stuff to be completed i will suggest you to visit INSURE-HEAVEN page for detailed answer ..

Really????? I mean, really???????

 

[ncagent83]

How do I know when I can get rid of Auto Loan/Lease Coverage? I believe this is otherwise known as gap insurance. I purchased a new 2011 Mazda 3 several years ago and was told that because of depreciation I could owe more on the vehicle than it was worth. Today I used Edmunds to calculate an approximate value for my car. I came up with around 11K - 12K. However, I owe less than that on my loan. Can I cancel this coverage?

I also have Roadside Rescue Assistance included in my policy. I have AAA too. Is this redundant? If so, I assume I would cancel AAA since the Roadside Rescue Assistance is included in my comprehensive.

My Bodily Injury, Uninsured and Underinsured Motorist coverage is 500/500. I was comparing prices on GEICO and Progressive, which are approximately $40 less per month than my current coverage, and I noticed that the maximum offered is 250/500. When I commented on this to my insurance agent, his response was that in our state the Wrongful Death limit is $500,000 and that I would be leaving myself a substantial gap in coverage if a claim occurred. So why is the maximum coverage provided by GEICO and Progressive 250/500?

Thanks for your help!

Like many folks on this post have said, talk to your agent. If you have to ask strangers on a forum, you need to find a new agent that you can trust.

GAP -it's up to you. Since it's a four year old car, I'd drop it.

RSA - Either drop the RSA on your auto or drop the AAA.

BI & UIM/UI - You should buy as much liability coverage as you can afford. Has your agent mentioned personal umbrellas?