content top

Can You Really Get Car Insurance for $25 a Month?

Can You Really Get Car Insurance for $25 a Month?

My office is in east Dallas one of the melting pot areas of the metroplex. Across the street on both corners are two insurance agencies which advertise car insurance for as little as $25 to $30 a month. You may wonder if it’s a sweetheart deal that no one really gets, so I thought I’d answer the question in this post which wraps up a look at liability oriented car insurance. The answer is yes, no, and what are truly getting or giving up! Yes, you really can purchase car insurance for as little as $25 to $30 a month. In the post I wrote two weeks ago, I contrasted full coverage versus liability insurance. Pure liability car insurance only carries bodily injury property damage coverage. There is no uninsured motorist, medical or personal injury protection, no roadside assistance, or rental car reimbursement (see http://wiseinsurancegroup.com/full-coverage-vs-liability-car-insurance/). Neither is there any comprehensive or collision coverage which is represented by a deductible. This type of coverage is typically reserved for a cash car when if wrecked, you’re able to walk away from without any regret as you would over the loss of a disposable pen. It also means you are carrying the lowest possible limits in Texas which are 30/60/25. These numbers mean if you hit someone and are found to be at fault, the policy will pay up to $30,000 for medical care per person with a maximum of $60,000 total and $25,000 for damage to the other car. I only write these limits for clients who are struggling financially because even a new Honda Civic can cost more than $25,000 No, not everything is covered, as I mentioned above. If you do want uninsured motorist coverage, protection for a stolen car, or roadside assistance, you’ll need to add that. Add that coverage and your monthly rate will be more than $25 or $30. You obviously can’t get full coverage for that amount either which the finance or lease company will require if you are still making payments for a loan or lease. Aside from giving up additional coverage you may want, the question is how well will such a company handle a claim. Some will handle them better than other companies. If you’re curious about who handles them well and who doesn’t, check out the Texas Department of Insurance’s web page, http://www.helpinsure.com//auto/index.html and click on company information chart. You’ll see who writes car insurance in Texas, their A.M. Best rating, and even their complaint index (anything over a 2 may be problematic). Keep in mind, if you truly want and can live with pure liability insurance, you can buy it affordably from even the major...

Read More

How Does Credit Impact the Cost of Your Insurance?

How Does Credit Impact the Cost of Your Insurance?

How would you like to pay less for your home and car insurance? I don’t know of anyone who wants to pay more than they need to! Most people I talk with realize paying less for their insurance is attainable simply by improving your credit, or insurance, score. People with good credit pay less for their insurance than someone with not so good credit. Texas is one of several states which permits insurance companies to use credit as a factor in determining the rate you pay for home and car insurance. Some permit credit based scoring to be used on property insurance only such as home and auto, while other states allow it to be used on other policy types such as umbrella, life, and more. This practice began about 15 years ago resulting from a study conducted at a Texas university. The study found people with poor credit are more likely to file an insurance claim than people with good credit, therefore, insurance companies determined that your credit score is a good predictor of future claim activity.  This is why people with good credit pay less for their insurance while people with lower credit scores pay more. As I’ve talked with clients and prospective clients, there are two questions that are routinely asked: What does credit have to do with a person’s home or car rate if they haven’t filed a claim? There is no link between prior claim activity; this is a predictor of future claim activity. This practice seems to be unfair, penalizing people with a lower economic standing. I don’t disagree. There are many reasons a person can have poor credit such as medical issues and expenses, a layoff, divorce, etc. It’s the reality of insurance in Texas and to know that credit is a factor is to be able to do something about it. The first step in improving one’s credit is to know what it is which is why I encourage people to order your free credit report each year. The free version won’t give you your FICO or numeric score but it will help you see what the three bureaus have noted on you. This can be enough information to clear up any incorrect items on your report.  I also recommend paying for the reports credit score versions of your reports.  Knowing your number can be very helpful in creating your goal to a better score. Improving your credit doesn’t happen overnight, it takes time and discipline.  The reward for improving it has many financial benefits including paying less for your insurance! Share any suggestions you have for improving your credit, along with your questions and comments on...

Read More
content top