Group and Private Insurance

If your budget is tight, it may be time to start cutting the fat on your insurance policies. You may have unnecessary coverage on your car insurance policy and you may have deductibles that are too low on your other policies.

Buying too much insurance can be as devastating to our finances as buying too little. The difference is that having too much insurance is like wet rot destroying our financial homes little by little over time and having too little hits us like a grenade exploding in our living rooms.

You will get better coverage if you pay more for it. However, the question you should ask yourself is “will I get at least a dollars worth of additional value for each extra additional dollar I spend on insurance?”

Whether you have a Texas car insurance policy or a car insurance policy in Pennsylvania, you may not want physical damage coverage on an old car. If you do find out how much your insurance company is likely to pay you if that car is stolen or totaled. If you feel that amount is too low, you may want to drop that coverage and save some money. (Physical damage coverage is the part of your policy that pays you to replace your car. Dropping or reducing this coverage has no impact on what your carrier will pay a third party if you were to hit them.)

Insuring yourself against a $100,000 heart attack is probably a very good idea. Insuring yourself against a $200 doctor visit probably isn’t. Insurance works best when you let the insurance company cover you for the big stuff and you cover yourself for the smaller stuff.

As a general rule, as you spend more money on insurance, you will get better coverage. This is true for car insurance, medigap insurance, and all other types of insurance. However, the benefits do not increase at the same rate that the cost does. Insure yourself against the catastrophic events that you cannot cover yourself and think carefully about insuring yourself for the smaller things you can pay for yourself.