General Insurance Information

The True Cost Of Insurance

By August 17, 2011 No Comments

You can’t escape the ads – online, radio, television, mail, billboards, and even on your grocery cart – “Save up to 15% on your car insurance.”  $4.15 billion in advertising dollars from the biggest insurance companies in the country want you to believe that the job of protecting your family and business should go to the lowest bidder.  I don’t know if that’s such a good idea. For that matter, I don’t think I’d want a reptile, a warehouse clerk, or an actor in charge of that job either.  Sure, they’re cute, but so is my Labrador, and I certainly wouldn’t put her in charge of my family’s finances.

That’s why I want to talk to you about the true cost of insurance.  We get calls from clients now and then telling us that our price is too high, and that they got a quote on the internet for less money.  My first question is “what did you get for that price?”  In other words, Do you have the same coverage? In most cases, the internet, doesn’t make a very good insurance professional.  The folks who staff the call centers are generally low paid, entry level workers, whose primary goal is to get you signed up.  They are not industry experts who keep abreast of changes in the marketplace, and thoroughly analyze a client’s risk.  No, they are there to sell policies… these are the Walmarts of the insurance industry – the prices can be low, but in most cases you get what you pay for.

So what’s the true cost of insurance?  Let’s say you have a $500,000 auto liability limit right now.  You go online and get a “good price,” but the liability limit is only $300,000.  It saves you $300/year though, so it’s a good deal, right?  Read on for the answer.  You’re in a car accident, it’s your fault, but it’s not that bad of an accident.  Oh and the other party suffers a hand injury.  $300,000 should be enough to cover it right?  Oh, but the person you hit is a plastic surgeon, and with her hand injury, she’s out of work for 4 months.  Her monthly income is $80,000.  There’s $320,000 for just her lost wages.  Now you’ve got the surgeon’s medical bills ($100,000), not to mention, that she was driving a Mercedes Benz S550 ($70,000).  Total cost for you: $490,000.

If you don’t have the cash on hand, the courts can seize your assets, garnish your wages, and more.  But for $25/month, you could have had adequate coverage in place.  With all that said, there is no reason you should be paying high premiums when all else is equal.  That’s why we can do the shopping for you.  We have direct access to over 60 different insurance companies to ensure that you are getting the best VALUE for your insurance dollar – both coverage AND price.  If you feel like you’re paying an unfair price, call my office and let us completely re-evaluate your coverage package.  If you got a quote elsewhere, send it over and let us evaluate it for you – we will tell you if it’s truly a good deal.   -Jayne Engle Allen

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