Thursday, July 2, 2015

Car insurance

I insure two cars. They are old - one 10 years, the other 14 years.  I am a cheapskate when it comes to cars. My guess is in aggregate their market value is $5000-$6000.  The insurance premium I have been paying each year for both is around $750 per car and there is an excess on claims of $650 on each.  I pay $750 annually to insure a car whose replacement value net of excess I would have to pay of about $2100 plus, to be fair,  I get comprehensive cover if I damage  another car.  The value of the comprehensive cover is about $250 per car (I priced this as a stand-alone policy) so that for the actual cover on each vehicle costs me $500 for a value of a written-off vehicle of excess of $2100.  This charge seemed outrageous to me and I even felt foolish for allowing this situation to develop.

I have been insured with the firm for 25 years and have never made a claim - all the costs above are discounted to reflect this.  After a long discussion with one of the insurer's representatives I found that about $150 of this charge was connected to the fact that one of the cars had initially been purchased with "finance". This adds a $300 premium to the total bill.  I had failed to notify the insurer that the financing had ended 9 years ago and a finger was wagged at me for my failure! I had no idea I was being levied a surcharge for this.

Eventually I did the obvious thing and took out a policy giving me comprehensive insurance cover only.  If either car is damaged beyond repair or stolen I will write it off.   My premium total dropped from $1500 to $550 a saving of $950 annually.  For this I gave up cover on the two vehicles insured of $4200.  Happy with that exchange.

My lifetime experience of insurance companies has been unfavourable.  On this occasion I have to say my own stupidity in not demanding a detailed accounting of costs in years past irritates almost as much as the over-charging.