Car Insurance Myth # 5

Saturday, January 7th, 2012 | Personal Insurance | Comments Off

Newer cars are always more expensive to insure.

Truth: Some newer cars are less expensive to insure that older ones.  it depends on the year make and model as well as the makeup of the household of drivers.  It is ALWAYS worth your time to work with an independent broker like Insurance Planning Alternatives.  When you work with us, we have the capability to shop the entire market for you and find the right carrier for your unique situation.

Car Insurance Myth # 6

Friday, January 6th, 2012 | Personal Insurance | Comments Off

Smaller, less expensive cars are cheaper to insure.

Truth: Maybe.  This depends on your coverage.  For liability only coverage, perhaps.  For comprehensive and collision coverage likely not because smaller, lighter vehicles generally sustain more damage in a crash and have a higher rate of being “totalled” in an accident.

Actual Cash Value vs Replacement Cost

Friday, January 6th, 2012 | Uncategorized | Comments Off

Insurance companies usually use one of two methods to figure how much money they will pay you if you have a covered loss that is less than your coverage limits.  For example if you have a fire that damages part of your house but not all of it, you will only get part of your policy limits.

The most common way to figure the damages is actual cash value, which is the replacement value minus depreciation. For example, if the video camera you bought five years ago is stolen at an amusement park, the amount the insurance company would pay might be fairly close to today’s market value for a five-year-old video camera.  Translation:  Not much.

The second calculation is simply the replacement cost of the lost property with no depreciation, but usually with a maximum value. That means you would be paid whatever it cost to replace your video camera with a comparable model at today’s prices, up to a preset limit. (Translation: New camera of like quality.)  This is less common and unless your policy specifically states it will pay the replacement value, it will only pay actual cash value.  The upside is that it is very easy and inexpensive to add replacement cost coverage to your policy.  If you have not added replacement cost, do it today!!!!

Car Insurance Myth # 7

Thursday, January 5th, 2012 | Personal Insurance | Comments Off

If I stay ticket and accident free, my rate will go down.

Truth: This will absolutely help lower your rate over time.  Unfortunately, other factors also impact your auto rates, such as credit and national and regional trends like increasing costs to repair vehicles, rising hospital bills and more lawsuits.

Car Insurance Myth # 8

Wednesday, January 4th, 2012 | Personal Insurance | Comments Off

Buying insurance online saves money.

Truth: NOT!!!  Your insurance policy will most likely not matter to you until you have to file a claim.  The online insurance providers are generally most interested in saving you money, and they do this by cutting your coverage.  When You work with Insurance Planning Alternatives, we make sure that the coverage you need will be there at the time of a claim.  And, oh yeah, we still save you money!

Car Insurance Myth # 9

Tuesday, January 3rd, 2012 | Personal Insurance | Comments Off

“No-fault” insurance refers to an accident that is not the policy holders fault.

Truth: “No fault” just means that your own policy will pay for your injury-related bills regardless of who is at fault.  Colorado is a tort state.  This basically means that the insurance of the at fault driver pays the injury related bills.

Car Insurance Myth # 10

Monday, January 2nd, 2012 | Personal Insurance | Comments Off

My car will be declared a total loss if it cannot be driven away after an accident.

Truth: Not necessarily.  A total loss is generally declared if the cost to repair the vehicle exceeds a certain percentage of the value.  A car can also be declared a total loss just if the airbags go off and there is minimal damage.  Every accident is different.

Car Insurance Myth #11

Sunday, January 1st, 2012 | Personal Insurance | Comments Off

If my car is totaled, my insurance will pay off what I owe on my loan.

Truth:  Maybe.  If your car is totaled, your insurance will pay what the car is valued at, minus your deductible.  (Think blue book.)  If you owe more than the vehicle is worth, you will have to come up with the difference.  Yikes!!!  If you have a loan or a lease on a vehicle please consider gap coverage.  This is  a very inexpensive coverage that will take care of this difference if your car is totaled.