Tuesday, April 28, 2015

LOWER Your NJ Insurance Deductible Rate; Here's Why

Accidents happen. And they happen all the time. The key to managing stressful moments like these is to be prepared. The number one issue my clients run into, once their car is damaged, is having to pay out enormous deductibles. You must pay your deductible before the insurance kicks in.

Remember, a higher deductible means you will pay more out of pocket in the event of an accident. If you got into a car accident tomorrow, would you be able to pay $1,000? Your insurance company won't pay until you meet the deductible and repair shops will charge storage fees if they're waiting on you to save up to pay your deductible. Let's say you have $800 worth of damage but you have $1,000 deductible. What good is saving a few dollars a month when you have to come out-of-pocket to pay because, although the damage is substantial, the damage hasn't met your deductible amount. You must consider this very real scenario when assessing your auto insurance coverage because this happens all too often.

Saving money by raising a deductible assumes that you have the cash on hand to cover the deductible in the event an accident occurs. If you raise your auto deductible from $200 to $1,000, you’ll see a big drop in your bill, but if something goes wrong with your car, you’re going to need that $1,000. If you don’t have that $1,000 in an easy-to-access place, then you’re in real trouble.
The solution is simple: if you have a well-funded emergency fund in a savings account somewhere, you can raise your deductibles some without worry. A well-funded emergency fund means a minimum of a couple months’ worth of living expenses, plus more if you have dependents. If you have that kind of cash that can be accessed with ease, then by all means, raise your deductibles. Problem is, most of us simply don't do this.

Won’t lowering my deductible cost me more money? Many people who consider lowering their deductible ask themselves whether such a move will cost them more in the long run. After all, if they’re having to come up with more money each bill, are they really saving money overall? This difference in decreasing your deductible from $1,000 to $250 is minimal over a 12 month period.

The following example illustrates an increase of just $22.33 per month. Obviously amounts vary from state to state and driver to driver, but it's still a good gauge that lowering deductible amounts really won't break the bank. Not to mention, not having to come up with so much money upfront, at the worst possible time (especially when most of us can least afford it) can make all the difference. (from GetRichSlowly.com)

Quotes for different deductible amounts for a 35-year-old male in Houston with a clean record who drives a 2008 Honda Accord worth about $14,000. The annual premiums with different deductibles were:

  • $1,230 with $250 deductible ($714 for liability, $120 for comprehensive, $396 for collision)
  • $1,152 with $500 deductible ($714 for liability, $102 for comprehensive, $336 for collision)
  • $1,062 with $1,000 deductible ($714 for liability, $84 for comprehensive, $264 for collision)
  • $962 with $2,500 deductible ($714 for liability, $62 for comprehensive, $186 for collision)
The amount he pays for liability coverage doesn't change, because that's determined by how much coverage he has bought. In this case, that's $100,000 bodily injury liability per person, $300,000 per accident and $50,000 in property damage liability. But rates for the physical damages coverages to the Accord change substantially. In this example, the driver changing his deductible from $250 to $500 risks $250, but saves $78. If he goes three years without an accident, he'll be ahead of the game. If he raises his deductible to $2,500, he risks an additional $2,250, but saves $268 a year. He would have to go eight years without an accident to cover the additional risk. But none of the math matters if he doesn't have enough money in the bank to pay the deductible. 

Good Luck And Safe Driving!

Tuesday, February 17, 2015

CALLING ALL CAR OWNERS: CNN Investigates Auto Insurance

Jay's Freeway Collision has been in business for over 30 years and our main objective has always been to return damaged vehicles back to our clients in pristine condition.

Over the past few years however, insurance companies have made it near impossible for body shops to exist. In a bid to increase profits, they have forced shops to use inferior aftermarket and damaged parts in car repairs.  For this reason, Jay's Freeway Collision does not participate in any insurance company "preferred" body shop list. As a result, we find ourselves, on a daily basis, fighting insurance companies on behalf of our clientele. It is a difficult struggle that costs us precious man hours and unnecessary aggravation. But because our standards are so high we continue to fight so that every single repair that is done in our shop is of the highest quality possible.

You have the right to take your car to any body shop you prefer, that is the law!

(CNN) Car repair shops say auto insurance companies are coercing them to use cheap parts and sometimes dangerous practices to fix vehicles involved in accidents.

Headlights held together by glue, dented rims and a new hood that's already coming apart are among the kinds of parts allegedly being pushed to go into cars as part of the repairs, according to some repair shops and attorneys general.

A body shop says it was being pushed to use this rusty part in a repair, according to the Louisiana Attorney General's office.

Owners say the insurance companies steer their policy holders toward body shops that follow their rules, providing a vital source of business. And they add, if a body shop refuses to make the suggested repairs because of quality issues, the insurers steer their clients elsewhere.

Major insurers deny the claims of impropriety.

More than 500 garages from 36 states are joining in a lawsuit against the top insurance companies, and states like Louisiana, Mississippi and Oklahoma are also getting involved.

Buddy Caldwell, attorney general of Louisiana, has filed suit against State Farm insurance, saying its low-cost repair program could be dangerous for customers who get back on the road in vehicles that are not roadworthy.

He said he fears thousands of Americans could be driving round in vehicles repaired with what he calls junkyard parts after seeking repairs from body shops recommended by their auto insurance companies who took their premiums and picked up the bill.

The issue is a nationwide one, said John Eaves, the lead attorney for the body shops involved in the lawsuit.

"It involves people from Maine to Mississippi to California. Every state in the Union has experienced the same sort of struggle here between the body shops trying to do the work the right way, and the insurance companies trying to cut corners and force them to use unsafe parts and unsafe methods on their cars," he said.

Watch video herehttp://www.cnn.com/2015/02/11/us/auto-repair-investigation/

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