Common Mistakes

February 24, 2022
Tom McCutcheon
Insights
Serving North Alabama

Buy Insurance to Protect You

Joel and I handle car wreck cases every day. Two principal areas where people are making common mistakes are 1) not buying proper insurance coverage that protects them and 2) making bad deals when they buy a car.

Car Insurance Mistakes

Understanding What Insurance Coverage is Important to You

Joel and I handle car wreck cases every day. Two principal areas where people are making common mistakes are 1) not buying proper insurance coverage that protects them and 2) making bad deals when they buy a car.

First, there are a lot of insurance companies advertising for people to tailor their coverage to suit them. This ends up meaning the cheapest deal possible. That’s fine until you need the coverage. A primary principle of insurance coverage is that you buy enough coverage to protect your assets. A minimum limits policy sounds cheap and may not cost a whole lot a month, but it only pays $25,000 for property damage and $25,000 for personal injury.

Who here remembers when you could buy a brand new full-sized pickup truck for $25,000? Today, I’d guess most new full-size pickup trucks cost closer to twice that amount. If you cause an accident, someone has to pay the difference between the amount of the coverage and the amount of the damage.

We regularly represent people who have over a quarter of a million dollars in medical bills. If you are just starting out in life and can afford to file bankruptcy, a minimum limits policy is simply fine. Even so, buy uninsured motorist coverage and medical payments coverage.

Second, the magazine Car and Driver had an article showing the difference between paying too much for a used car and financing at a high rate. A 2012 Chevy Cruz costs $10,041 if bought properly. The same car costs $20,919 if you pay too much and finance for too long. Shop smart, because the insurance company that has to pay for your car if it’s damaged is only going to pay the actual value of the car. Most people are disappointed in the amount they receive for their property damage. There are services such as CarFax and Consumer Reports that help people in deciding the fair value of a vehicle they want to buy. Take advantage of these services before you buy your next vehicle.

Buckle up, drive safely and as always, your referrals are appreciated! (256) 333-5000