Car Insurance – The True Cost of Cheap Car Insurance

I almost saved money on my car insurance, and lost money out of my pocket!I had a bad day. After changing my car tire, I was hot and tired. My kids were in the car, and they were anxious to resume or trip. I stopped in a parking lot phone our hotel because I wanted them to hold our reservation, and did not think I would make it in time for normal check in. I had no trouble with the reservation, but then I backed up right into a large truck that had slid into my blind spot.

Of course, I should have checked my rear view better. One might have argued that I should have taken a break before resuming our trip. However, I did not, and for the first time in 20 years, I was judged to be at fault for an accident. The truck was only scratched, but my mini van needed a new back door.

I did do one thing right. A few weeks before I was tempted to save a few dollars by cutting out my collision insurance, and only keeping liability. My car is a few years older, and I had read that advice in a popular financial advice article. I chose to wait on that decision, and I was really glad I did!

One thing I did do was to increase my deductible from $250 to $500, and that worked out ok. It did lower my premium by about 20%. I could afford to absorb the loss, and would save the increase in my bill after about a year.

However, because I had kept collision, my insurance company spent about $1,000 to replace the door. I had to throw in the other $500. That was my deductible. The insurance also included a rental car, so that saved me about $300 more! I was protected with $1300, and this was a minor accident! My insurance agent told me that collision coverage only cost me an extra $15 a month! It would take a long time to justify the accident expense in saved premiums.

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