One of the biggest issues facing insurance consumers today is the misconception of auto insurance. Any advertisement you see will almost certainly focus on your car, and the damage to it after an accident. They tote the value of their particular insurance policy in getting your car back on the road quickly and with little inconvenience to you. While this is a very important piece of the auto insurance policy, this perspective creates tunnel vision in consumers.
The reality of auto insurance is that it covers so much more than your car. It is designed to cover injuries, lawsuits, and property damage that arise out of an auto accident. There are twelve basic coverage parts on a Massachusetts Auto Policy, and out of the twelve, there are only two coverage parts that have anything to do with your actual vehicle. When auto insurance is viewed in this light, it makes sense that your car’s age or condition have very little to do with how much coverage you should carry on your policy.
In addition, your auto insurance premium is not based solely on your vehicle’s value. There is a common misconception amongst consumers that their auto insurance premiums should decrease as their vehicle gets older. The fact is, your vehicle is far more likely to be repaired than totaled. The cost of parts, labor rates, etc. do not decrease simply because a mechanic is putting a new part into an old vehicle, or a body shop is repainting an older vehicle. The cost of parts and labor, when coupled with rising healthcare costs and the ever-increasing prevalence of auto accident-related lawsuits, all contribute to increases in insurance rates across the board.
The next time you look at your insurance policy, and think to yourself “Why am I paying so much for insurance on a car so old,” remember that the insurance isn’t just there to protect your car, it is there to protect you and those around you. If you have questions about your insurance or would like to talk to one of the FBinsure team members, call or stop by any of our 9 convenient locations today.
