Hey there. Thanks for coming. My name is Butch Swank from Goodlad & Swank Insurance. Today we’re going to talk about auto insurance.
We get a lot of questions, and it’s a very nice compliment to my team because I hear this a whole lot: “I’ve never been told that before. How come no one ever explained that to me?” So I’m going to try to take a lot of what my team does and try to share this with you.
So a critical thing to understand about auto insurance is it gets broken up into two pieces more or less. There’s comprehensive and then collision. So let me try to explain the two. Comprehensive is going to be, as an example, a pine tree smooshes your car, hail destroys your hood, vandalism…that’s comprehensive. So that’s going to basically say there’s a lot of different calamities that potentially happen to you.
The other one is collision and it is specifically that. It is you crashing into that pine tree or someone else crashing into you. So we separate these into two different coverages. And the reason that they’re separated is because they’re two, basically two, different risk types. And basically risk gets assigned on, a lot of the time, towards the collision. So if you’re getting a ticket or someone else is getting a ticket, it’s because of the collision component. The pine tree is not getting a ticker for smashing your car. So this portion on the right is basically going to be going towards points on your driver’s license, it’s going to impact your ability to pay future premiums, because likely the more that you rack up here, the more that the premium will go up. But let’s be real. If you’re prone to having pine trees fall on your car, the comprehensive side could also end up costing you money too. So I want you to be aware of what the two are.
Now another component to auto insurance is a deductible. Most people understand how deductibles work, so I’ll spend a tiny bit of time on it. 100, 500, and 1,000 dollars are pretty typical. And if you bump your bumper into a fence, then you need a new bumper. It costs 1,500 dollars for a new bumper. You pay 100 dollars out of the 1,500. The insurance company pays 1,400 and you’re responsible for 100. If it’s 1,000, guess what? You’re responsible for 1,000 and the insurance company’s going to be responsible for 500. So that’s simple. But keep in mind also, anytime you’re talking about deductibles, the higher the deductible, the lower your premium. So figure out that balancing act.
The most important part, or at least a critically important part, of auto insurance that is overlooked a whole lot is the liability component. So let’s say we go to the collision part where you are responsible for causing a very, very bad accident. Now, depending on what your assets are, you’re gonna want to hope that you had solid liability numbers on your auto policy.
So we’ve got amazing clients. We’ve got 21 year old clients that are cashiers at Publix that are just getting started in life. Actually, we’ve got one who bought a house. So good for her. But we’ve got other ones who are literally just getting started out in life, and they have next to zero assets. And if you can do that, you can potentially have a liability limit of like 10,000 up to 20,000, which is basically the absolute minimum. I will tell you that insurance companies frown on you trying to have the absolute minimum. So if at all possible, I would say try to bump it up to 25,000 / 50,000. So the 25,000 / 50,000 means 25,000 per person or up to 50,000 dollars per accident. That’s what that little breakdown is.
But if you are an orthopedic surgeon who owns your own clinic, you’ve got a bunch of people working for you, and you’ve got an 800,000 dollar house and you’ve got 10,000 / 20,000, that’s what the carrier is going to pay out so what would end up happening is there would be a lawsuit, and they’re going to garnish your wages possibly for the rest of your life. So talk to your agent and figure out what are some appropriate liability limits for you. If you’re this orthopedic surgeon, you should not only have potentially 250,000 / 500,000, you should realistically also have an umbrella policy which will afford up to a million dollars in liability coverage.
So there’s a huge spectrum here, and it all costs money. And you’ve got to figure out what makes sense to you. But be mindful of what you’re doing when you’re going out there on the road, you’re putting yourself at risk. You’re putting other people at risk. And the point of insurance is to have a certain degree of peace of mind. So talk to your agent, figure out what is an appropriate number for you, what makes sense, and be smart about it. You’ll feel a lot better when you get in the car when you know that you actually have the right numbers.
So if there’s a question, if there’s something that I haven’t answered, I ask you to please call our office. It’s 239-674-7630. If you prefer, you can go to our website. It’s goodladandswank.com And I thank you very much for watching.