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Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 10159
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I am 46 years and living in Florida. My automobile is

Customer Question

Hello,
I am 46 years and living in Florida. My automobile is increasing instead of decreasing. I have had no accident or tickets in the last 10 years.
My car is financed. I need to know the correct amount of insurance I should be buying.Any assistance will be much appreciated.Michelle
Submitted: 8 months ago.
Category: Finance
Expert:  Lane replied 8 months ago.

Hi Michelle ... Maybe you could expand a little bit on what you mean when you say "my automobile is increasing."

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Does this mean in VALUE? Typically we see increases in values only with antique cars, cars for which there is some special demand (where, for example, no new models are being made and only a few exist), etc.

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Do you mean that your insurance costs are going up?

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Let me know and we can go from there

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Thanks,

Lane

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(I'll be here)

Customer: replied 8 months ago.
Hello,
Automobile insurance is increasing.
Expert:  Lane replied 8 months ago.

OK great let me look at Florida requirements

Expert:  Lane replied 8 months ago.

As a foundation for purchasing insurance (Much of the answer here depends on YOUR objectives) we should first look at the Florida Minimums.

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The minimum requirement is $10,000 personal injury protection (PIP) and $10,000 property damage liability (PDL).

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If you have been in a crash or convicted of certain offenses, the Florida DMV can request you purchase additional auto insurance coverage such as bodily injury liability coverage (BIL)

Expert:  Lane replied 8 months ago.

This is low by state standards.

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When talking to an insurance person, it helps to know the standard jargon for talking about these two basic coverages (it's really three numbers because for bodily injury liability limits there is a per person limit that the insurance company would pay and a per accident limit that the company will pay).

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The three numbers will look like this: 20/40/10

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For example, 20/40/10 means coverage up to $20,000 for each person injured in an accident, up to a maximum of $40,000 for the entire accident, and $10,000 worth of coverage for property damage.

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So Florida's MINIMUM coverage looks like this 10/20/10 ... again, low by average state standards.

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Just for perspective here are a few other states' minimums

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GA: 25/50/25

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CA: 15/30/5

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AK: 50/100/25

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OH: 12.5/25/7.5

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SC: 25/50/25

Expert:  Lane replied 8 months ago.

Now back to your question, it's really a risk tolerance issue. Keep in mind that these numbers are the very lowest, by state law, that can be purchased.

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What you'll find when getting quotes is that the level of your deductibles plays a much larger part in the premium, than raising the amounts of coverage.

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I really hate using rules of thumb here, because everyone's tolerance for risk is different, and situation is different (teenagers in the home both make the premiums more expensive but also may creat the need for higher limits, higher amounts of coverage)

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The best answer is to look at the cost for the amounts a different levels of coverage and deductibles and find that happy medium between what you can afford and what lets you sleep at night.

Expert:  Lane replied 8 months ago.

The very best answer is to shop around and get a feel for how the companies differ for the same amounts of coverage at the same deductible levels. Deductibles are the amounts that you must pay before these coverage amounts kick in.

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There will be a comprehensive deductible (the deductible amount before coverage for things OTHER than a collision will pay) and a collision deductible (the deductible amount before the coverage for an accident will pay).

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One strategy for lowering costs, (which will still keep you covered well for those catastrophic things that can happen) is to take a higher comprehensive deductible, because these things (say you know your mirror off your car, or a limb from a tree in your yard falls on the car hood) are, many time, less expensive to pay for out of pocket, than the amount that your insurance premiums go up, when you file a complaint for this kind of thing.

Expert:  Lane replied 8 months ago.

My own opinion?

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Get more than the minimums (for perspective, the two highest MINIMUM states are Arkansas and Maine, both at 50/100/25).

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But raise your deductible as much as you can (especially the comprehensive deductible) and still feel comfortable.

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This has the effect of lowering premiums but keeping your coverage higher for those things that you truly could never pay for.

Expert:  Lane replied 8 months ago.

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I hope this has helped.

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Please let me know if you have any questions at all.

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If this HAS helped, and you DON’T have other questions … I'd really appreciate a positive rating (using the rating request, faces, or stars on your screen)

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That's the only way I'll be credited for the work here.

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Thank you!

Lane

I hold a JD (Juris Doctorate, a doctoral degree in the law), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial, Social Security & Medicare, estate, corporate & tax advice since 1986.

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