There are many things to think about when buying auto insurance, other than price alone. You should carefully consider all insurance coverage options, which will play a big part in the cost of your premiums.
It may sound a bit confusing, but getting the cheapest policy can actually cost you a lot of money in the long run. Why you might ask? If you get the minimum coverage from the state, you can stay naked, so to speak. In the event that you are involved in a collision with a car, the amount you will need to cover the accident could be significantly more than your policy limits.
Worse, you could be sued and have your pay garnished. If you hurt another person in an accident you caused and you couldn’t pay all their medical bills, you probably will.
Get the best car insurance for your needs
Let’s stick to the cheapest type of insurance, the basic liability insurance. If you get the state minimums, you can get monthly rates starting at $30. The problem is, your car could be worth $15,000 or more. If you got into a collision, guess what, your plan wouldn’t pay for repairs to your vehicle. When it’s added up in full, that means you just lost $15K, which is a lot of money.
Now that cheap liability policy has cost you thousands of dollars. Simple public liability and property damage should only be used under certain circumstances. For example, if you have a vehicle that is worth less than $3,000 and you don’t drive it much, you may be able to take this risk. Also, if you’re a college student with an old ride that’s not worth much, you can take the risk and stay within your budget. However, if you have an expensive car and assets to protect, you will need to purchase additional protection.
The other thing to consider with these cheaper policies is legal liability. The United States is a very controversial country. There are literally tens of thousands of personal injury lawyers looking for new cases. This means that if you get into a vehicle incident for which you have been held responsible, a limited policy may come back to bite you. Let’s say you only have $50,000 in medical damage protection. You check your cell phone while driving, drive through red and T-bone a nice lady in a used Honda. She goes to the hospital for two weeks and earns $250,000 in hospital expenses.
Her attorney will immediately sue you for the balance of these charges, in this example $200,000. You can go to court and challenge this, but it will cost you thousands of dollars to hire a lawyer. The judge in this example could award the victim the $200,000 plus legal fees, which would more than likely devastate you. A payment schedule of $2,000 per month can be deducted from your salary for ten years. So your $39 a month money savings in the long run will just cost you a fortune.
The most important thing to consider when buying auto-ins is protecting your assets. If you make more than $60,000 a year, take out a policy that covers up to $500,000. Should you nevertheless have a serious accident, you are well covered and you will not be financially crushed. You might pay $130 a month and even more for a higher-limit plan, but in the long run, it’s the smart move to make.
You can take advantage of good driver or senior discounts and save 5% or more. Another great tip is to increase your deductible to $1,000 or higher. This way you can buy an extended ins subscription at a lower rate. Don’t forget to put the $1k aside in the unfortunate event that you get into a crash and need to file a claim quickly.
Buy car insurance directly and save a lot
Now that you’ve chosen the type of insurance you want, it’s time to shop around for the best rates.