Did You Ever Wonder? Insurance Q&A

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By Harvey Brown Special to The Pineapple  

Question: Why doesn’t my auto insurance premium go down over time, even though my car is getting older? Answer: As cars get older their value depreciates (goes down). The vast majority of auto claims (physical damage) involve repair, not a total loss of the car. The cost of parts, and labor, to repair an older vehicle can be as much, or more in some cases, than the cost to repair a new car. When you couple this with the fact that other auto coverage, such as Bodily Injury and Property Damage Liability, Personal Injury Protection (“No Fault”), Uninsured Motorists, and Medical Payments, cost virtually the same premium, whether you drive a newer or older vehicle, you can see that auto premiums will rarely go down over time.

The vast majority of auto policies will pay to repair your vehicle up to the actual cash value (depreciated value) of your car. For example, if you have a car that is worth $1,500 and the cost to repair it is $2,000, then the insurance company will “total” your car, i.e. they will pay you the cash value ($1,500) and not the ($2,000) it takes to repair your car. At that point, you would have to go out and either buy a new car, or keep your car and pay the difference ($500) out of pocket to repair your damaged vehicle.

A money saving tip we often recommend for our clients, is to consider dropping physical damage coverage on their vehicle, once it reaches about 10 years of age. Remember: Hurricane Season Officially Ended November 1st – NOW is the best time to reevaluate your insurance. Next Month: Who can I let drive my car?  The Harvey L. Brown Agency are experts in auto, home, business, life/health and represent over 40 companies. If you have questions or concerns about your insurance, call 561-276-0369 Monday-Friday 9-5pm.