Cheaper is Not Always Better ... A Break Down of Auto Insurance Coverages.

                 If you have a car then you have probably bought insurance. Gone thru the rigorous task of calling (or walking in) different agencies to try and find the cheapest insurance possible and finally came to a decision for your insurance carrier. How ever do you know what kind of insurance that you actually purchased? Your insurance Agent/Broker should have gone thru with you the different options you have from Liability to full coverage and what that covers. If your like most people it went in one ear and out the other. Not really listening to what you are purchasing but more to what it COST. Some times cheaper is NOT better.

 For example when you tell your agent you want the “CHEEPIST" bare minimum insurance you need to be legal. Don't expect to be insured when the insurance company doesn't cover the accident next week when you are hit and the driver of the other car doesn't have insurance. This is a UN Insured motorist claim. The CHEEPEST bare minimum insurance DOES NOT COVER! So lets break down the coverage one by one. Maybe the next time you go get insurance you have a better idea of what you are purchasing and if it's going to be worth it in the long run.

 According to State of California law you must have the basic liability limits of 15/30/5. This covers in the event you hit some one (does not cover you, your passengers or your vehicle). It will pay the other parties bodily injury $15,000 per person in their vehicle no more than $30,000 per accident and $5,000 for property damage. So if you hit somebody and the claim is more than these limits you will have to pay out of pocket for the excess in damages. Insurance professionals will usually recommend you have higher limits if you are a home owner, a business owner or have assets that can be taken if your limits are not sufficient.

 Un Insured Motorist is not required by law. It is required that your agent at least OFFERS you and explains to you what it is. Un Insured Motorist covers in the event that some one hits you and they do not carry insurance. This covers you, your passengers and your vehicle. Bodily injury $15,000 per person in your vehicle, no more than $30,000 per occurrence and $3,500 in property damage. If you have full coverage Un Insured Motorist will wave your deductible. Remember to be covered for property damage you do have to get some form of identification from the person who hit you.

 Comprehensive and Collision are what you would typically call your “Full Coverage". You will usually have a deductible with this type of insurance. A deductible is your co payment of the damages that needs to be paid before your insurance company pays for your claim. Collision will cover in case your car collides with another solid object, regardless of who was at fault. Comprehensive is any thing OTHER than collision I.E fire, vandalism, theft. Keep in mind that the higher your deductible is the lower your insurance will cost. The Lower your deductible the higher your insurance will cost.

 Having this coverage on your insurance policy will insure that you will be covered in any circumstance. Of course you have extra coverage’s such as excess medical payments, rental insurance and towing. Those types of coverage’s can be added usually at a fair price and are extras not all insurance companies offer. Remember that the higher the limits the more your insurance cost. You get what you pay for! if you go with the cheapest insurance to save a buck at the moment you might end up paying hundreds or even thousands in the long run if you don't have adequate coverage.


 As always discuss with your Insurance Agent/Broker about your policy. What is best for you might not be what is best for some one else. Take your time!

 For more information check out our web site for some useful tips and a free quote from one of our experienced agents.


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The 2 Dirty Words in Insurance ...

Well it's time to talk about those dreaded dirty little words of the insurance industry. That when mention, it could end a deal before it even begins “The Broker Fee”. What is a Broker Fee? A Broker Fee is a non regulated fee that only your insurance broker can charge for writing your insurance policy. The reason for a broker fee is simply a service charge. Think of it this way, when you go get your car looked at for a tune up they have an inspection fee, just to see what’s wrong with your car. When you change your oil they charge a service fee, Plumbers have estimate fees, there is start up charge for cable Etc. Broker Fees are just that! A fee you pay for a service rendered.


So why is the broker fee so bad in insurance? Well it all depends on how much it is. The Broker Fee is a little tricky because it really is up to your insurance agent how much to charge you. A lot of brokers these days try to hide this fee because they know that it is NOT very appealing when your insurance is only $350.00 a year for a basic liability plan and your Brokers Fee is $300.00. That by the way has to be paid up front. Does that seem a little unreal to you? Well believe it because hundreds of people really do pay up wards of $300.00 to $500.00 in broker fees. From a sales point of view there is an acceptable reason to charge a fee. Some insurance brokers are taking advantage of the fact that they can charge what ever they like. Here are some tips to make sure you are getting a fair price for what you’re buying.



First look at what kind of insurance policy are you buying? If it's the basic liability required by law an acceptable fee would be around $50.00 to $65.00. When you need more coverage such as full coverage uninsured motorist then you can expect to pay $70.00 to $85.00. Commercial Insurance, depending on what kind of business you have the fees are a bit more. Between $100.00 and $250.00. These are not standard fees that every insurance company uses. How ever they would be more acceptable for the services that an insurance broker will be doing for the life of the policy. Second if you have a bad driving record you can expect to be charged more. A bad driving record means you are a high risk to insure and more likely to cost the company a lot of money in claims. Last if you are a good driver ask to be put with a preferred carrier such as Mercury, Safeco, or Travelers. Preferred companies DON’T charge broker fees.

Now the next time your going to buy insurance and you seem to be paying a bit too much to start the policy ask your agent what the broker fee is, you can also ask to see the Broker Agreement. Every insurance broker should have a broker agreement that you sign. It should list any and all fees that the broker charges for services. Please try to remember as well that your broker will be servicing you for the life of the policy and a fee is acceptable. Just make sure it is one that you are comfortable with and reflects the kind of policy you will be purchasing.