Here’s a transcript of the video.
Hey, Good Afternoon. I wanted to talk about a common misconception. We very often find clients who have assets and they have an old car. So, in an effort to mitigate (insurance) costs, they lower their liability limits! For example, very frequently, I will look at a policy and they have a $500 deductible on a 10 year-old beater and they have low liability limits.
That is just crazy!
Really what you are saying is, “I want to lower my costs so I lower my liability limits. In the event of an accident, I will be responsible and be forced to pay out in the event I damage someone else. And I am found responsible for their Bodily Injury or Property Damage.” This number can me hundreds of thousands of dollars plus.
At the same time, you are maintaining a low deductible on this old beater protecting a very small amount of value and it just makes no sense.
If you have an old car and can’t attribute any value to it and you are looking to save in terms of cost, you may want to remove your Comp/Collision Coverage, although I am not sure that is advisable. However, you certainly never want to lower your liability limits when you can expose yourself.