Before you cancel your current coverage, determine what makes these policies differ. In some cases, you are not comparing policies evenly, and that could cost you. Here’s an explanation.
What Is the Lowest Costing Auto Insurance?
The cheapest policy in any given area is usually the minimum required policy for the state. Most states require drivers to maintain basic coverage. Usually, it is liability coverage. It only applies when you cause damage to another driver during an accident. It does not cover your car at all. The state's liability insurance requirements are also usually very low. They are often much lower than you should have if you want to avoid paying out-of-pocket for damage. In other words:
- The coverage only protects other drivers.
- It tends to offer just the state’s required amount of liability insurance. No more.
- You could still be responsible for losses if the damage is higher than those limits.
To get more coverage, you'll likely need to increase your liability limits. You'll also probably want to include physical damage coverage for your own car. By doing so, you'll be able to get extra financial help during trying times. While this might mean a premium increase, this is usually much lower than the cost of a wreck.
Most drivers do not benefit in-full from liability-only policies. However, liability only policies may be an option if you have an old vehicle with very little value. In this case, an accident may cause you to have no coverage for your vehicle. Yet, you do not care. You feel you can replace the car. Yet remember, you might still want additional liability protection for others' damage.
Better Ways to Reduce Your Costs
When choosing car insurance, be sure your policy always reflects the true value of your car and the amount of coverage you need. Your agent can help you to determine this based on risk factors in your local community. An estimate of the value of the car can also help.
Then, ask about ways to reduce costs.
- Raising your deductible might lower your premium costs.
- Adding more security to your vehicle might minimize risks and cut policy losses.
- Avoid getting points on your license. It'll help maintain your status as a low-risk operator.
- Do not file numerous claims on your policy if you can pay for them yourself.
- Bundle your auto insurance with home insurance or cover multiple vehicles under one plan. Insurers frequently reward loyalty.
The bottom line here is that those inexpensive policies offer limited coverage. Most people will not have enough protection in the event of a simple accident. You do not want to pay for a lawsuit settlement. Instead, choose a customized plan that matches your real risks. Our agents are happy to help you compare rates from our trusted insurance partners.