There is much talk lately of our “cancel culture,” which refers to the public shaming of people who say or do things that are deemed offensive.
This blog is not about that kind of cancellation. But now that I have your attention, let’s discuss cancellation of insurance.
When to Cancel Insurance
Many people cancel coverage to save a little money. That often is the worst reason to cancel insurance.
I once lived in a condominium where one of my neighbors was selling her unit. She cancelled her homeowner’s insurance to save a little money when they were close to unloading the unit.
Sadly, at that very time, one of my other neighbors in the unit directly above hers had a fire. Her unit sustained serious water damage and required extensive remodeling just to make it saleable. Eventually, her unit sold for much less than it was worth.
She saved a few hundred dollars and cost herself well over $100,000.
Cancel the Correct Policy
In a previous blog, I talked about a client who meant to cancel his motorcycle policy but unintentionally cancelled his auto policy. Of course, he was involved in a car crash that was primarily his fault and got sued.
Insurance that would have covered both his legal fees and the damage he caused was now not available, because he cancelled the wrong policy. He hired me to push back on the lawsuit.
He was lucky. I was able to push most of the blame onto the other driver (who was insured). My client avoided paying anything out of his pocket other than my fees. Still, he made a mistake that cost him several thousand dollars.
This example demonstrates another great reason not to purchase insurance online, but instead to use an insurance broker.
Timing is Everything
If you are buying a home, selling a home, purchasing a vehicle, or selling a vehicle, timing is everything.
Don’t cancel your auto insurance before you actually sell your vehicle and turnover title. Never buy a new house and forego purchasing homeowner’s coverage until you’ve lived in the house for a while. Fire, theft, and water damage happen indiscriminately. They do not wait for you to become insured.
Call your insurance broker before finalizing purchases or sales, so you can begin planning.
Thou Shalt Not Cheap Out!
You might rationalize that your car is paid off and old and not worth much, so you stop paying for collision coverage, only to have that reliable rust bucket destroyed in a collision. How are you going to have money to pay for a new vehicle if you don’t have collision coverage?
You may think it is cheaper to have $25,000/$50,000 limits in auto coverage than it is to have $250,000/$500,000 limits. And it may be slightly cheaper. But are you really going to feel satisfied you made the right decision if you accidentally hit the vehicle in front of you and cause serious injuries to all four occupants? If even one has surgery, you may be personally liable for anything above the $25,000 per person limit or the total aggregate limit of $50,000 for all 4.
Car insurance is not much more expensive for higher limits than for lower limits.
While you are at it, it is almost always a good idea to purchase a personal liability umbrella policy. A $1 million umbrella policy costs as little as $100 or so a year. Yes, that’s correct.
You can make a huge mistake and hit a pedestrian causing serious injuries. With an umbrella policy, you not only have lawyer’s fees covered. Your policy will cover up to $1 million in damages after the other policy limits are met. That’s a lot of security for a little bit of money.
Insurance is important if you own significant jewelry, artwork, or bicycles (and you MAMILs — Middle-Aged Men in Lycra — you know who you are!). Do not cheap out and just keep your homeowner’s policy in place but avoid insuring scheduled items like engagement rings, diamond earrings, fancy watches, art collections, wine collections, or equipment for expensive hobbies, like bicycling or hunting.
If it’s important to you, it’s worth insuring.
There’s a Policy for That
Read and understand your policies!
No one reads insurance policies. They are boring, long, and seemingly designed to induce sleep. But you should!
And if you are of the mind that you won’t understand it anyway, talk to a professional insurance broker. A qualified insurance broker will walk you through what your policy covers, what your needs are, what you might want to add, and what you probably don’t need. That’s peace of mind.
Contact Chicago Personal Injury Lawyer Stephen Hoffman
As in all cases involving injury and potential liability, if you have been hit by a vehicle, immediately get medical treatment, report the crash to police and your own insurance company, and contact a lawyer with expertise in your type of case, such as auto accidents, bicycle accidents, or pedestrians hit by cars.
If you've been in an accident and have questions, contact Chicago personal injury attorney Stephen L. Hoffman for a free consultation at (773) 944-9737. Stephen has nearly 30 years of legal experience and has collected millions of dollars for his clients. He is listed as a SuperLawyer, has a 10.0 rating on Avvo, and is BBB A+ accredited. He is also an Executive Level Member of the Lincoln Square Ravenswood Chamber of Commerce.
Stephen handles personal injury claims on a contingency fee basis, which means you don’t pay anything upfront and he only gets paid if you do. Don’t wait another day, contact Stephen now.