In the excerpt below, Retirement Insider Editor Bob Irish interviews Mark’s friend, Tony Martorano.
He’s a 35-year veteran of the auto industry. And he knows all the secret ways car buyers get cheated.
Here are some of the tricks the car insurance industry uses to cheat you… and what you can do to prevent it.
From Retirement Insider Editor Bob Irish in the Wealth Builders Club:
Bob: You worked for a top-tier insurance company. What should our readers look out for if they’re dealing with a lower-tier company?
Tony: The biggest problem with lower-tier insurance companies is they don’t want to total vehicles that are badly damaged.
Let’s say your car is worth $14,000. If you have $14,000 worth of damages, your insurance company would have to total it… and write you a check for $14,000.
But if their body shop says the car is fixable for $12,000, that’s the option they’re going to want to go with. It saves them $2,000.
Bob: And the body shop, of course, would rather make $12,000 than estimate the damages at $14,000 and have the car scrapped, right?
Tony: Right. And while we’re on the subject, if your car is totaled, always compare the insurance company’s offer to prices on sites like Edmunds and Kelley Blue Book. If those appraisals are higher, ask for more money.
Bob: How can our readers evaluate their insurance companies?
Tony: J.D. Power has an auto claims satisfaction study that may be helpful. And you really need to check your state’s insurance commissioner’s website. But your insurance company’s financial strength may be the best way to evaluate it. The best companies collect a lot of premiums, pay claims, and have the best financial ratings.
The best-known rating agency is A.M. Best. But you need to be a subscriber to access its ratings. Standard & Poor’s rates insurance companies as well. You can get its ratings for free, here.
Reeves’ Note: The full interview above is located in the Wealth Builders Club. It’s Wealth Stealers essay No. 8: “Auto Insurance: The Two-Headed Money Masher.”