Monday, December 28, 2009

Car Insurance

Car insurance is one of those things that can eat you alive. It's another of those expenses that chips away at your income, but there are options.

I drive used cars that don't have car payments. That gives me certain advantages. In NH, I don't even need insurance to drive legally on the road. Believe me, the insurance companies are aware of that fact. It gives the vehicle owner a bit more leverage. Should insurance get too outrageous in price, I could tell them to go pound sand.

Of course, there are risks.

Don't get into an accident while uninsured. Besides being liable for all damages, the state will then make you pay for insurance if you want to continue to drive. If you travel into another state, like say Vermont, and get stopped, one of the first things an officer will want to see is your insurance card. A good friend of mine got caught that way once, and it cost him a pretty penny to sort it all out.

For my own vehicles, I take a middle course. I buy basic liability insurance. If I do get into an accident, the other person is covered. Seems like the right thing to do. It's one thing for me to take a risk that I'll total my vehicle, it's another thing entirely to put another person at risk. It's a bit of a gamble, but all I'm really risking is the vehicle. Worse comes to worse I replace it with another beater. At least I'm protected from lawsuits that would take my other property.

Now if you buy a new car with a loan, you are really screwed. You have to have complete insurance coverage, not to protect your loss, but the bank's loss. Miss one insurance payment by even a day and the bank gets a letter from the insurance company. Soon after the bank sends you a nastygram telling you to prove you have insurance or to pay off the loan. The insurance company and the bank gang up on you quicker than weasels in a hen house.

Since I own my vehicles, the insurance company is much more generous. If late on my insurance, they'll let me know I have 10 days to make good on it. I've even had them stretch that a bit or accept partial payment. Since I don't actually need them, they are willing to work with me.

Here's one big tip I'm leaned about doing business: deal local. My insurance is provided by a local agent. I can walk into their office and deal with real people -people from my community that I know. It's much easier to hang up the phone on me than to throw me out of an office. I'm a big guy and hard to throw.


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