What else is important on my insurance coverage?

Certainly the first thing virtually everyone looks at is their premium. But is it the most important part of my policy? Almost everyone would agree it is not the most important part of their policy. I’ve seen policies written elsewhere that had a great price but the coverage woefully lacked. It does little good to have insurance if you are under-insured.

As expected, too often consumers focus only on price and it is easy to understand why. Price is certainly important. And while I understand that anything you buy has to fit into the household budget, insurance requires paying attention to more than just the bottom line. If you fail to properly protect yourself you could suffer the consequences in the event of a claim.

Several years ago a gentleman came to me with a slightly older vehicle with only liability insurance coverage (no coverage for his truck). It only provided coverage to someone else if he was at fault. I advised him that for only a few dollars more he could carry full coverage, which would fix his vehicle in a loss or potentially give him some money back if the vehicle was stolen or damaged beyond repair. Some months later the vehicle was totaled and the client was grateful for having the full coverage. He exclaimed that without the insurance money he would not have had the funds to buy another vehicle. Naturally, he was very appreciative.

Because the client carried only liability insurance coverage every other insurance agent he spoke with just put liability coverage on the vehicle the same as the prior agent. We went the extra mile by recommending full coverage because the cost to do so was minimal. And the client is glad we did.

When you shop and compare your Arizona auto and homeowner insurance be sure to fix your eyes upon more than just the bottom line.

Auto Insurance

The State of Arizona has placed the minimum liability limits at $15,000 for bodily injury and $10,000 for property damage. This is the coverage that pays to someone else for injuries or damage to their vehicle or property. These amounts are way too low for anyone. Hopefully at some point they increase this minimum.

My advice is to carry limits no lower than $25,000. But if you compare this limit with a higher amount like $50,000 or $100,000 you will likely find the additional cost is very small.

If you are a homeowner, high wage earner or have assets we recommend carrying limits even higher than described above.

Optional Coverage

Arizona auto insurance policies offer several coverage items that are optional. While you are not required to purchase these items they are worth considering adding to your policy. An example is uninsured motorist, underinsured motorist, medical, towing, car rental and glass.

Medical

This optional coverage covers injuries to you or passengers inside your vehicle. Some consumers believe they do not need medical coverage if they own health insurance; however, it also helps protects your passengers who may not have health insurance. Also, your private health insurance plan may have gaps in coverage and this extra coverage under your auto policy may help.

Uninsured Motorist (UM) and Underinsured Motorist (UIM)

Uninsured motorist covers you and your passengers for injuries causes by others when 1) the other party is at-fault and 2) the other party is no insurance on their vehicle.

Underinsured motorist covers you and your passengers for injuries caused by others when 1) the other party is at fault and 2) their insurance policy does not have enough coverage to pay for damages to you or your passengers

Towing, Car Rental and Full Glass Coverage are optional coverage you add for an additional cost. Towing and Full Glass Coverage apply even if your vehicle is not involved in a claim. Car Rental is different, however. Your vehicle must be in a claim situation for this coverage to kick in.

Homeowner Insurance

When buying homeowner insurance knowing your dwelling coverage is important. Some insurance companies seem to give their agents more flexibility in determining how much to insure homes.

It is not uncommon for a home in Arizona to require $100-$130 per square foot to insure. For higher end homes this per square footage amount can go up significantly.

Our insurance carriers have a software program that helps us in determining what the estimated rebuild costs will be. While these programs are never perfect they serve as a guide.

But beware of any insurance agent who offers to insure your home with a low dwelling coverage amount. If it sounds too good to be true it probably is.

Liability Protection

If someone were hurt on your property and believe you are negligent you likely will be sued. Liability protection covers you. My advice is to take the maximum allowable coverage since this item is not the driving force behind your premium.

Medical Coverage

If someone were hurt on your property and needed medical attention this coverage will help defray costs. Just like liability protection above, we recommend carrying the highest limit offered by the insurance carrier.

Condo Insurance

Most condo units have an association that buys insurance to take care of the roof and walls. As the owner of the condo you need Arizona condo insurance to cover everything else inside. This includes your personal property, as well as the lights and fixtures, carpet, tile, sinks, bathrooms, cabinets, window fixtures, built in appliances, shelving, and more.

Remember that in a claim you will have to buy everything at future costs, and things tend to go up in price. Short cutting your coverage is not the wise move.

Loss Assessment: This coverage is very important when buying condo insurance. Your association’s insurance policy may have gaps in coverage and likely has a deductible. Loss Assessment helps cover your unexpected costs or obligations thrust upon you when your association’s policy has a leak in coverage.

Final Thoughts
Keep in mind that your agent cannot read your mind. He/She does not know what you feel is most important. Perhaps it is your deductible? Perhaps it is the bottom line premium? Perhaps you do care more about what the coverage are. Talk to your agent and have a discussion about all aspects of your policy. You will be glad you did.