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Auto Insurance

It seems today that people seem to think, having a high deductible, can be bad, because you could be out a lot of money if something happened!!!

But in all reality high deductibles are good, in most case scenario’s. I will explain why, in my opinion, high deductibles are good!

No Fault Accident states:

In a no fault state, it pretty much means what it says. When you have an insurance policy it covers everyone. Including the driver and passengers that would most likely be at fault in the accident. Simply enough to explain, it doesn’t matter who is at-fault. To find out more if you are an at or no fault state, please visit this link. This blog is not going to cover or give advice for no fault states.

Liability in an at fault state:

Liability: Lets get down to some of the basics of your auto insurance policy. I am going to list the requirements and options of a Colorado insurance policy. In Colorado we are an at-fault state. This means all you have to carry is liability. This covers you against any possible third party damages. You and the insurance company are party A and B, everyone else is potentially party C or the third party.

In Colorado the requirements are to carry 25/50/15. This breaks out to 25k per person, 50k per accident, and 15k property damage. This will cover third party damages of, medical bills, pain and suffering, ambulance ride, lost wages, and if they sue you in court. This in itself is not very much coverage. We will cover that later on. You also have the option of buying more liability. He are the common increments. 25/50/15, 50/100/25, 100/300/50, 250/500/100 and the 500 and 1 million combined single lmits.

Medical payments: Is for covering the driver and passengers in the the at-fault car, in an accident. The amount is per person and can buy as little as $5000 per person all the way to $100,000 per person. This depends on the insurance company. It covers anywhere from an ambulance ride to medicals bills, and sometimes lost wages. Though this not the main focus of my blog, I wanted to go over this.

Under-insured/Uninsured motorists bodily injury: Covers anyone else who is fault and doesn’t have insurance and who possibly hits and runs. Also covers anyone who is under insured and doesn’t carry the standard limits of 100/300. This also covers you while your a pedestrian.

Towing and rental car reimbursement: in itself is self explanatory and is an optional coverage.

Comprehensive and Collision: This covers physical damage done to your vehicle. This includes, at-fault accidents, not at fault accidents, vandalism, theft, weather, riots and so on. You can buy the deductibles in 100, 250, 500, 1,000 and sometimes 2,500 and 5,000.

So my point is why carry high deductibles for comprehensive and collision on your vehicle? Well first of all, 85 percent of the time, these coverages are the most expensive on your policy. You would be surprised the price difference in premium from a 100 dollar deductible to a 1,000 dollar deductible. Over time you will save enough money to pay for your deductible twice. Also if something happens and you have a high deductible, shops will usually work out a pay plan.

You also want to take the money you saved off high deductibles, and BUY more liability with it. But I know your saying “Mark, I can’t pay that much money for a high deductible, if I got into an accident!” That is a good point. But you shouldn’t worry about your car in an accident. If your at fault in an accident you should worry about the person you just hit! For all you know, there could be a baby in the other car! Or even worse, you could have just killed a father of 3, that supports his family and is worth a couple of million dollars. Are you worried about your car now? I am not. I am worried about someone I could kill or injure really bad. You can always replace a car, but you can’t replace someones spine, or even the person them self. A 1000 dollars might seem like a lot, until they’re suing you for a million dollars. And if you have the state minimum liability, then you pretty much screwed.

My advice is to pull out your policy and take good look it. Its usually a wash when you raise both your liability and deductibles. Maybe its time to bump up your coverages or start looking for a new company. If your worth a lot of money, then you need to carry an umbrella on top of your auto insurance liability. These policies are cheap and protect you quite extensively. It is a separate policy by the way. If your a broke college student and only can afford the state minimum, that’s probably okay. And as always if your in the Colorado area, your more then welcome to call me, get advice and get a quote.

Cheers, Mark.

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