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. 


  1. It is always important to be aware of the updates on your car insurance, especially when it comes to the costs you are paying for the firm. It’s good that you are aware of all the costs and insurance premiums you are paying for, as it shows that you have the sufficient knowledge in handling the payments for car insurance, or even any other bills and payments that you have. Thanks for sharing your thoughts on your car insurance!

    Joshua Duncan @ Focus Insurance

  2. Insurance is must for a car to protect it from future risks. Thanks for giving the description with your own example. It was quite easy to understand how it is needed. Along with insurance it is also indeed to take care of the vehicle with a good servicing center. I prefer Mercedes Service Wilsonville OR for my Mercedes maintenance.

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  4. nice info, Thanks for sharing your thoughts on your car insurance!

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  5. Insurance is necessary for obvious reasons, but it's an odd relationship. The act of getting insurance is you (the consumer) betting that something bad is going to happen, and the insurance company making a calculated bet that it won't. I had no idea that there was a surcharge for having purchased a car through financing. I am sickened by the thought of how much money that has probably cost me over the years.

    Steven Keltsch @ Allied Insurance Managers, Inc.

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