Should you buy cheap car insurance?
There are some different factors impacting your auto insurance premium. For example, the insurance coverage you select, your deductibles, the limits of your policy might impact your policy’s cost. Nonetheless, the amount you pay for your car insurance might also rely on your age, driving record, the quantity of drivers on your insurance policy, and much more.
It is worth noting that a lot of price-conscious people concentrate on the first group of items – limits, coverage and deductibles. It is partly because they are the basic elements to add and change when you compare insurance price online. Now, if you are wondering if cheap car insurance really worth it, then you should read on this entry.
3 Reasons Cheap Car Insurance Might Be Risky
- You May Put Your Wealth And Even Potential Future Earnings At Risk
There is a fact that, minimal coverage also means minimal protection. Whilst the minimum liability coverage of your state looks attractive, you should acknowledge how it can help you after a certain unexpected accident. Despite it seems like a decision that helps you save money at that moment, it can rapidly turn ugly if it is time to file a certain claim.
In the U.S, most states require their drivers to have liability coverage. Those states set minimum limits for the coverage. Nonetheless, they are really “Bare bones” insurance amounts that might not completely protect you in terms of finance in case serious accidents happen. For instance, your state sets a minimum limit for bodily injury liability insurance of $25,000. That might seem like a huge amount of money, yet it is not when the other driver is hurt seriously and you are legally liable. If the medical bills of the other motorist take about $40,000, then your car insurance might pay up to $25,000 and you will pay for the rest.
The court might order an extra $15,000 to be withdrawn from your savings, the sale of your assets, or a wage garnishment. Maybe, for an additional $25 per month, depending on your car insurance policy, you may triple your liability limits as much as the minimum limit of your state. After the accident, it looks like a bargain compared with inexpensive car insurance.
Read more: A list of best car insurance companies
- Cheap Car May Cause Expensive Damage
It is said that even a very cheap car still needs a proper amount of liability coverage. The reason behind it is that you may cause an accident damaging another more expensive vehicle or cause serious injuries to another motorist or pedestrian. Therefore, your best option is not to cut corners on the liability coverage of your car insurance policy.
If your personal vehicle (no lease or loan), you typically have the chance of dropping comprehensive and collision coverages to help reduce your premiums. Yet, it is also advised thinking carefully about decreasing comprehensive coverage to save money. If your vehicle is vandalized or stolen without comprehensive coverage, then you will have to pay out of your pocket to repair or replace it. In fact, this coverage is rather inexpensive and could be worth it.
Read more: Is your car overinsured?
- Dropping The Uninsured Motorist Coverage Could Be Risky
If people without car insurance or just has the minimum limits of the state damage your vehicle or injure you, then you can be left with main expenses. Underinsured or uninsured motorist coverage might be useful in protecting you in those situations, but it is just an optional coverage in a few states.
Before choosing the type of coverage, you should consider this: those people skimping on auto insurance might have other financial challenges which make it hard for them to be responsible for your own medical bills or some other losses, even when a court determines them to be responsible.
By consulting and choosing an experience car insurance agent, you can choose the appropriate amount of car insurance coverage. They can look for methods to help decrease your minimum costs. A good car insurance agent will often decrease your costs much more significantly by recommending you cutting your coverage.