How to avoid overinsuring your car
In the United States people are just starting to recover from the effects of the financial crisis and therefore it is only common sense that most of them will be looking to pay an insurance premium as small as possible for getting their car covered. And the biggest problem that keeps us away from paying the right sum for this is overinsuring our cars.
What is overinsurance? Although it may sound like a complicated term, it is simply paying more than it is worth it for getting coverage for your car. Do you need an example? Let's say you have a 20 year old car that isn't worth more than a couple thousand dollars now and you get full comprehensive insurance for it, paying every year half of the car's value.
But what about collision coverage? Well, it is definitely recommended if you have a new car, but again in the case of a 20 year old one, you are simply throwing your money away. If it gets totaled, you won't get more than 60 or 70 percent of its value at the moment of the accident, so you can imagine that in some cases, the insurance premium is simply more expensive than this.
So the easiest way of avoiding overinsurance is to stick to liability coverage for older cars. However, if you own a new car, this is not recommended anymore and you will have to discuss with your insurance agent in order to pay the right premium for the right coverage.