How to Choose Your Auto Insurance Deductible

 

There are numerous ways available for saving money on your auto insurance coverage, many of which can be seen here.  The last item on the list, "raise your deductibles," is one that many policyholders consider doing first because it's simple to do and the results show up almost immediately.  The question is, what amount should your deductible be?

The Purpose of Your Auto Insurance Deductible

Vehicle insurance, like virtually all other insurance, is based on the sharing of risk.  When you take out an auto insurance policy, the insurer underwriting the policy is taking on a portion of the risk to which you're subject by owning and driving a vehicle.  If you suffer a covered loss, the insurer is responsible for compensating you for an agreed upon portion of that loss.  

The deductible associated with your policy is the amount you agree to pay toward the loss before your insurer pays their portion of the claim.  This deductible represents the amount of risk for which you retain responsibility in the event you suffer any loss covered by the policy.  The larger the deductible, the greater your risk of personal financial loss when a claim is made and the lower the insurer's financial risk.  Because of this, a lower deductible typically means a higher premium and choosing a higher deductible will mean a lower premium.

Choosing Your Auto Insurance Deductible

Choosing your auto insurance deductible is done when you take out your policy but can be changed, if desired, while the coverage is in force.  The average amount most people select for their deductible is $500, although some policyholders may opt for an amount as low as $100.  Upper limits can be in the thousands, especially when insuring a very valuable vehicle.

Since a lower deductible means higher premiums, you may opt for a higher deductible such as $1000 or $2000 in order to save money on your policy premium costs.  Contact your agent to learn how much you can save.  There is no deductible required for the liability portion of your coverage and you may choose to carry different amounts on your collision coverage and your comprehensive coverage.

Though you may save money when selecting a higher premium, any claim you submit will require you to come up with more out-of-pocket money.  You should have an emergency fund allowing payment of your deductible in the event of a covered loss.

Types of Off-Road Vehicle Insurance

 

If you own any type of off-road vehicle, whether it's an ATV, dune buggy, dirt bike, snow mobile or golf cart, be aware that your standard homeowner's insurance likely provides you with little or no protection against it being damaged or destroyed.  This is especially true since your off-road vehicle is taken off your property.

North Carolina State Law

In the State of North Carolina, insurance is required on all registered motor vehicles.

Laws governing ATVs are similar to the laws governing motorcycles.  This means that all registered ATVs are required to carry at least a minimum amount of liability coverage, both bodily injury protection and property damage liability.  The minimums are the same as they are for motorcycles and cars:

• $30K per person/accident bodily injury liability
• $60K for all persons per accident
• $25K per accident in property damage liability

Even if your vehicle is not registered because it's not used on public roads (which is illegal anyway) or public lands, having liability protection is important to have in case you're involved in an accident that's deemed your fault.  You'll be held financially responsible if you cause any property damage or injuries while using your vehicle.  Without insurance, the cost of these damages will have to come out of your own pocket.  If your off-road vehicle is registered, you'll also be required to carry insurance for uninsured/underinsured drivers.

Off-Road Vehicle Insurance

Even if your off-road vehicle isn't registered and you're not required to have insurance by law, obtaining coverage for your own protection and peace of mind is still a smart move.  There are four types of coverage that go into making of an off-road vehicle insurance policy.  These include:

1. Bodily Injury Liability - pays toward medical costs of parties injured in an accident you cause.
2. Property Damage Liability - pays toward the repair/replacement of property owned by a third party damaged or destroyed in an accident you cause.
3. Collision Coverage - helps pay toward the cost of repairing/replacing your ATV if damaged in a collision with another vehicle, a tree, a fence, etc.
4. Comprehensive Coverage - helps pay to repair/replace your off-road vehicle if it's damaged in ways other than in a collision.  This may include damage caused by weather (such as a hail storm), fire, vandalism or if your off-road vehicle is stolen.

Full protection is the safest option.  You should read and understand your policy completely.

Converting from Term to Permanent Life Insurance

 

People buy life insurance for lots of good reasons and, if you're like most, your reason for carrying life insurance falls into one or more of about half a dozen categories, including:

1. The number one reason for your buying life insurance is to provide financial protection for your loved ones in the event you die prematurely.  
2. You want to meet your financial responsibilities even after your passing.
3. Life insurance benefits provide cash that can make up for your family's loss of your income.
4. Benefits can be used to pay off debts left behind such as a home mortgage.
5. Your children may have the tuition needed to attend college from your life insurance proceeds.
6. Insurance benefits may be used to pay for your burial/funeral expenses.

Kinds of Life Insurance

There are several types of life insurance that fall into two broad categories:

Term Insurance, which is the simplest, most basic form of life insurance.  It pays benefits to your beneficiary if you die during the term of the policy, which is normally from anywhere between one and thirty years.  Most term policies provide no other benefits besides the death benefit.

Permanent Life Insurance, also called Whole Life Insurance, provides a death benefit for your whole life.  In addition, these policies accumulate a cash value that you can access after a certain period of time.  Traditional whole life insurance policies usually have a level death benefit amount and level premium cost throughout the life of the policy.

Converting Your Term Life Coverage to a Greensboro Permanent Life Insurance Policy

Term life insurance is typically sold as being the most affordable way of providing financial safety to your loved ones in the event of your unexpected death.  Because term insurance is "pure protection," unlike whole life with its cash value provision, you can get a higher death benefit for a significantly lower premium.  This is most important when families are young, with limited resources but a large need for a family financial safety net.

When your resources have increased and the need for the safety net becomes less, you may be considering converting your term policy to a Greensboro permanent life insurance policy.  Term policies typically have a provision allowing for this conversion, as long as it's done within their accepted time frame.  Simply contact your insurance agent and request a conversion.  A medical exam and going through underwriting should not be needed.