In March, I wrote about reducing the amount of automation in handling personal finances. Leaving your payments on auto-pilot is asking for trouble. Leaving your brain out of the decision-making process is a sure way to rack up overdraft fees when you don’t have enough funding to pay an automatic bill.
Also in March, I canceled collision coverage on my auto insurance. With a hefty emergency fund and a car that is no longer valued beyond $10,000, this is something I should have done a long time ago. My car insurance is deducted from my checking account every month, so I had not been focusing on this particular expense.
At this time, however, I decided to write an article about car insurance and that forced me to examine my own. I saw I was paying for unnecessary collision coverage, so I canceled it. The process was simple. I logged into my insurance company’s website, found the customer service phone number, and canceled the extra coverage within minutes. It was a surprisingly easy process.
I later received confirmation in the mail. My coverage was adjusted as promised.
Yesterday I received my renewal documentation in the mail, and somehow, collision coverage was back on my plan, and my total premium was higher than ever. Not knowing whether this was an error in the paperwork, I called customer service. Somehow, collision coverage was included in my renewal. The customer service representative suggested that by the time I removed collision coverage in March, and even though my renewal date wasn’t for another three months, my renewal paperwork had already been processed.
He was happy to remove collision coverage from the renewal and I should receive new paperwork in seven to ten days.
If my finances were fully automated, I might not have opened my renewal documentation and would have instead filed it away with the rest of my documentation. I knew that I had made a change recently, and when I received the mailing, I wanted to verify I the company renewed the plan as expected. I was surprised to find it did not, but glad I checked.
By the way, my insurance company, Liberty Mutual, is not a public company; I’m a customer and a stakeholder. Interestingly the company announced just yesterday that its property and casualty insurance subsidiary has filed for an initial public offering to access an influx of capital.
Updated June 24, 2016 and originally published May 11, 2010.