I'm sure by now you have all seen the commercials by USAA's insurance competitor; the ones which feature the craziest situations — all of which could potentially happen. No matter what company put together the commercial the lesson is the same; not having the right auto insurance coverage is flirting with disaster.
USAA's Certified Financial Planner Scott Halliwell says, "The fact is, bad things happen to good people every day. Without adequate insurance, the split-second bad moment of a car accident can easily turn into years of bad moments as you pay for property damage and medical bills that can ruin your financial life. Having adequate auto insurance can save you this prolonged agony."
He's right. We don't like to think about it. Car insurance isn't glamorous or sexy. I'll have to admit that having adequate car insurance is like being happily married and being able to snuggle up with no makeup, in your sweats, with a cup of hot cocoa to watch The Bachelor. You know full well you have no one to impress, you're covered, and you can watch all those other uninsured's fight to get their hearts broken.
Knowing you have the right coverage is more than just meeting the minimum requirements of the law. As USAA Certified Financial Planner JJ Montanaro and I discussed, using the state mandated minimums as a guide for your auto insurance may leave you underinsured. "It may not be like the PT test where the minimum is enough to get you by.", says JJ.
JJ and Scott both encourage USAA members to spend some time getting to understand the different parts of an auto policy. This will help you make appropriate decisions as to your coverage. JJ asks clients to do a little visualization, "When it comes to property damage coverage I always encourage folks to do the three car test the next time they are on the road. Look at the three cars ahead of you and imagine being at fault for totaling them all. Will your property damage be enough?"
I know that visualization isn't supposed to make me laugh, but it does. All I can see when someone tells me to visualize car insurance is the movie Fried Green Tomatoes where Kathy Bates is fighting for the parking spot at the Winn Dixie and screams at the young girls as she squishes the back of their Volkswagen, "Face it girls, I'm older and I have more insurance." Who hasn't wanted to do that once in their lives?
Whether it's protection from the unexpected, the peace of knowing you're covered, or the desire to scream out to the world that you've lived and learned you still need to know where you stand in regards to your auto policy coverage. Scott says, "Though we all want to save money, cheaper isn't always better when it comes to auto insurance."
This month — and at least once a year — take a peek at your auto insurance policy. Review your liability, medical payment, uninsured/underinsured motorist, and your comprehensive physical damage coverage. Life can throw you some unexpected twists and turns and while flirting may be fun, dealing with disaster isn't.
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