July 31, 2011

How Some Drivers Buy Too Much Coverage

There are many drivers who do not buy enough car insurance coverage and then there are drivers that buy too much insurance coverage. It is not uncommon for drivers to err on the side of safety and purchase much more car insurance coverage than they actually need. Many drivers choose to purchase too much coverage simply because they want to know that their policy will cover any claim in full should a loss arise. Quite often these people purchase an abundance of coverage simply because they have a high net worth and want to take the steps to protect their assets. However, other times drivers with a low net worth and no assets to protect purchase too much coverage simply because they want to know that any claimed filed against them will be paid in full by the insurance company.

It is a well-known fact that millions of insureds are over-insured and carry too much insurance coverage. Many carry too much coverage because they do not know how much coverage to secure. Quite often, insureds aim on the high side to make sure they will definitely be covered. At the end of the day, what compels a driver to buy too much insurance coverage for their vehicle depends on a variety of factors. Even when people are advised not to purchase too much insurance, many insureds feel that they are better off if they spend the extra money on an insurance policy with more coverage.

In addition to selecting high policy limits, some drivers over insure by electing optional car insurance coverage that they really do not need. Drivers that own a car that has little to no replacement value may want to consider dropping their collision coverage after speaking with their representative. In some cases, having collision on a vehicle makes no sense whatsoever. This is especially true if the vehicle has little or no replacement value.

Insureds who elect to pay additional money per month for excess medical payments coverage may also be overdoing it as well. It is not uncommon for drivers to pay for excess medical payments coverage simply because they want to know that they will be covered no matter what. In some cases excess coverage makes sense and in others it does not. Excess coverage can become quite expensive over the years.

Drivers who purchase too much car insurance coverage often do so without ever thinking about how much money they may be wasting. No matter what compels a driver to purchase more insurance than they need, many drivers are spending much more than they need to spend. Before securing a policy, drivers should discuss their insurance requirements with a representative.