It is a good idea to have an auto insurance review at least once per year and more frequently if some substantial change occurs. Work with your agent at Family Insurance Associates, serving Ruidoso, NM, and the surrounding area, to make sure your auto insurance is adequate.

Your agent will give you a recommendation based on any changes that occurred since your last review. Be sure to inform your agent about moving, using a vehicle differently, letting other people drive it, any custom modifications that were made, and where it is stored.

Replacement vs. Actual Value

For a new or fairly new vehicle that is less than five years old, having replacement value coverage is probably a better choice than only insuring actual value. With replacement value, if your vehicle is totaled, you may be able to make a claim that replaces the vehicle with a brand-new one of the same model type.

For an older vehicle, insuring the replacement value may not be practical. You may choose to insure only the actual value. The actual value is what you could sell the vehicle for on the open market. If you are insuring a lower value, your premiums will be reduced.

As your car becomes older, you may want to adjust the comprehensive portion of your auto insurance to cover the lower value of the vehicle.

Deductible

Your choice of a deductible will impact your monthly premiums. One technique to consider is to have replacement value for newer cars along with a high deductible to keep premiums lower. The deductible will be the amount you are out-of-pocket if the vehicle is totaled.

As the vehicle gets older, you can switch to the actual value and lower the deductible to have less out-of-pocket expense if the vehicle is totaled.

Summary

Lowering the insured value to the actual value of an older vehicle is something to consider with each annual auto insurance review. To get a review and a quote, contact your agent at Family Insurance Associates in Ruidoso, NM by calling 575-257-0998 to discuss your options.

When considering a car insurance policy with Family Insurance Associates in Ruidoso, NM, having the right information is critical. Not understanding how your policy works could end up costing you thousands of dollars. The following are five car insurance myths that you should know about in New Mexico.

Myth 1. Your car’s color will affect how much you pay for insurance.

Many people believe that red cars automatically have higher insurance rates, but nothing could be further from the truth. The only factors that determine your car insurance rate are details like the age of the car, your driving record, the safety features of the vehicle, and how much it would cost to replace the vehicle. 

Myth 2. A new car is more likely to be stolen than an older car.

In 2018, a report by the National Insurance Crime Bureau (NICB) showed that most stolen cars were older models. In fact, the most stolen car was the 1998 Honda Civic, with 6,707 thefts reported. The thinking behind this is that because many people are keeping their cars longer, thieves choose those older cars because there’s a huge resale market for their parts.

Myth 3. Car insurance will cover you if your car is totaled in a crash.

If you get into an accident, your insurance company will pay the actual cash value of your car. The only time that the full cost of your vehicle is covered is if you have gap insurance.

Myth 4. If your friend is driving your car and gets into an accident, your friend’s insurance will cover it.

Absolutely not. If your friend gets into a car accident while driving your car, you and your insurance are responsible. Insurance tends to follow the car, not the driver.

Myth 5. The older you are, the more insurance you’ll pay.

Not true. Older drivers, especially those over 55, can usually get their rates reduced by up to 10 percent if they take and complete a defensive driving/ accident prevention course.

Contact our office in Ruidoso, NM to speak with a friendly agent from Family Insurance Associates about getting a quote for your vehicle.