While state minimum car insurance may not be enough for every driver, auto insurance companies can provide cheap car insurance for drivers on tight budgets looking for affordable premiums. All 50 states have financial responsibility laws that require every driver to have a minimum amount of car insurance and provide proof of insurance as well. Although this is intended to protect the public from negligent drivers who cause injury and damages to others, most states have low liability limits that may not provide enough coverage, making it important for drivers to find cheap coverage so they can purchase enough protection from their carrier and shield themselves against out-of-pocket expenses for repairs and potential litigation.
Mandatory state requirements are usually $25,000 per person and $50,000 per accident. Medical bills and payments for an injury to one person in an auto accident can easily exceed the $25,000 limit. If more than one person is injured in an accident, the cost of the injuries could reach more than $50,000 per accident coverage. If an insured driver has any financial assets, a court can force the sale of the assets to satisfy judgments for injury claims that exceed the policy limits. For this reason, buying low cost car insurance online does not necessarily mean purchasing coverage at the state minimum, but finding quotes from a reputable, top ranked insurance company so family’s can buy enough to adequately cover themselves.
Although the limits vary between states, most states have a minimum property damage limit of $10,000. While this may seem like a lot, the average new car in the U.S. costs nearly $25,000. In a serious accident, the cost of car repairs or replacement could be more than $10,000 and the driver at fault for the accident would have to pay the difference out of pocket. Carrying state minimum limits coverage does not absolve the driver from responsibility for damages that exceed policy limits.
Uninsured motorist coverage is similar to bodily injury and property damage liability insurance, but UIM covers the insured driver for injuries and damages caused by a driver who is uninsured or has insufficient insurance to pay out the no-fault driver’s claims. Not all states require that drivers carry uninsured motorist coverage, but in some states that don’t require underinsured insurance, drivers have to sign a waiver of coverage. Uninsured motorist protection can be very cheap, giving drivers the opportunity to protect themselves with extra coverage just in case an opposing individual was not responsible in purchasing coverage or making on-time payments. Drivers comparing car insurance quotes can easily add UIM coverage onto their policy just to see the rates car insurance companies charge.
Only 10 states have no fault car insurance laws, and not all ten require that drivers carry personal injury protection (PIP car insurance) coverage. PIP insurance or medical payments coverage pay medical bills for the driver and passengers in the insured car if they are injured in an auto accident, regardless of who is at fault for the accident. Some states, like New Jersey, offer optional protection for lost wages, lost services and a death benefit at an additional cost.
Insurance companies, agents, and brokers know how to cut corners on coverage just to make your premiums look low, so drivers seeking a policy should ask questions first. Don’t ever just ask for the cheapest rates they can get you. This will likely result in absolutely bare minimum liability limits, and what could have cost you an additional $100 per year could end up costing you thousands in out-of-pocket repair costs, medical bills, and attorney bills.
Multiple Policies. In some cases, it pays to have more vehicles insured due to the savings discounts for “multiple car coverage”. A family of three may pay more for insuring two vehicles than they will for adding a third, even if it is not being driven. Additionally, if one car is newer and more valuable than another, don’t buy the same coverage for all the cars in the policy. Buy full coverage for one and liability-only protection for the other if you can afford to replace it in-case of a major accident. Usually, the threshold is, if a car is worth less than $5,000, it is probably better to have liability coverage only and forego more protection.
Furthermore, insuring a vehicle with the same company that carries your life insurance or other type of insurance is another way to save. Companies usually offer up to 15% off each policy you buy with them.
Low Mileage. Another way to save is to decrease the usage of each vehicle by asking for a “Low Mileage Discount”, while choosing higher deductibles. Not that you needed statistics to prove it, but for obvious reasons, the less you drive, the less chance you have of getting into a car accident and submitting a claim to your carrier.
Customer Loyalty. According to my friend in the insurance industry, this is the most publicized discount, but not 100% of consumers who qualify have it applied to their discount. Every car insurance policy-owner should call their carrier and ask for it to see if they can up the percentage discount or if they qualify, no matter how long they’ve been a customer (assuming it’s been at least one year, though).
Defensive Driving Classes. Some states require insurers to offer a 10% discount for up to 3 years to drivers who have completed a defensive driving class. The classes are inexpensive, about $30 and take about 8 hours. Even in states which do not mandate the discount, many insurance companies offer the discount voluntarily. Some classes are offered online, but drivers seeking cheap car insurance should make certain that the school offering the classes is approved either by the state or by the insurance carrier.
Most drivers get online quotes to find affordable rates, whether they need state minimum auto insurance coverage or a policy with more protection. Drivers can also easily compare different types of car insurance, including collision coverage, liability insurance, or comprehensive car insurance. Instead of dealing with a sale rep, agent or broker, just add and subtract these coverage options from your policy and you can see how much each one adds to your monthly or annual premiums. Like anything else, the more information you have at hand, the better decisions you are able to make.
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