Another nasty little secret about insurance.

I covered life and homeowner’s in a previous rant, but I suppose I ought to tell you about auto insurance as well. First, some insurance companies say they will ‘forgive’ a first accident and not raise your rates.

They won’t forgive a damn thing. Ever. Another cute little selling point is the phrase “full replacement cost”. Insurance companies insure your vehicle for it’s full replacement value…..which means the amount a dealer would have given you for it before you wrecked it. But they make it SOUND like they are going to buy you a brand new car…..Right? You have to REPLACE the car you wrecked, so “full replacement cost” sounds like the cost of a new car. It isn’t. It’s the low blue book value of your car. So I bought my car for ~$14,000 eight years ago and paid 6.5% interest on it….which made it about 20k. Then I paid the insurance company over $6,000 in premiums over those eight years. And they are going to give me……the “full replacement cost” which, somehow works out to just less than I have paid them in premiums. They have been investing my money all these years and have probably managed to double the 6k, so they are still making out….but they call this a ‘loss’ and want to raise my rates.

Who lost? They didn’t lose anything. “I” lost.