Coverage Limits Matter

True story – Once upon a time, several years ago, we had a client who had auto insurance through our agency.  They were looking for ways to lower their premium, so they requested that we lower their liability limits to the required state minimums.  Whenever we receive a request like this, we do our best to discourage them as well as educate them about the necessity for adequate limits.  If they insist on reducing their limits, we require them to sign a form confirming their request and we thoroughly note the conversations we had with our customer discouraging the changes.

When we received the call from this customer looking to reduce their coverage, we went through our coverage conversation, but the client still insisted on reducing their limits.  It wasn’t even six months later that a driver in the household lost control of their car, left the roadway, and crashed into a house.  Luckily no one in the car or house was injured, but the accident actually knocked the house off of it’s foundation!  Well guess what?  The property damage liability limit on the policy was now only $10,000 (required state minimum) and the cost to repair the house and reset the home on its foundation well exceeded $10,000.  And guess who could not believe that their auto policy property damage limit was not sufficient to fully cover this claim?  And guess who had to pay thousands of dollars out of their own pocket to the owner of the house?

Car hit House

Lesson learned!

Most people are always looking for ways to save money on their insurance and immediately assume lowering their coverage is the only or best way to get savings.  As agents though, we know there are many other ways to save on your insurance and in fact reducing your coverage is something we would never recommend.  Instead of reducing your coverage, try some of these other money saving tips on your auto insurance:

– Place your auto and home insurance with the same carrier in order to take advantage of multi-policy discounts.

– Take a NYS approved accident prevention course to save 10% on applicable premiums.

– Look at increasing deductibles for comprehensive and/or collision coverage.

– Review your policy frequently with your agent to make sure you are always rated correctly and receiving all applicable discounts.

Please think twice before the next time you want to reduce your insurance coverage limits!!!


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