Why You Don’t Want to Skimp on Car Insurance

Getting car insurance quotes is often seen as a hassle, just something you have to do if you want to drive. In most states, car insurance is required by law for all drivers. Many people buy only the mandatory minimum coverage, but that’s not necessarily a good idea.

Car insurance is there to protect you in case of an accident, and the minimum coverage often doesn’t go far enough. You may save a little on premiums each month, but carrying too little car insurance can spell financial disaster in the long run if you’re involved in an accident.

Most states require that you have enough car insurance coverage to pay for other people’s property and injuries in the case of a crash, but what about you, your property, and any passengers in your vehicle? If you’re only carrying personal liability and property damage, your own injuries may not be covered, and your passengers could get hurt and need money to pay for their medical bills. If your car insurance policy doesn’t cover everyone involved in the collision, you could be sued and have to pay the costs out of your own pocket.

Consider how much you use your vehicle, to get to and from work, to take the kids to lessons and practice, to run to the grocery store or other errands. How would your life be affected if your car was totaled in an accident? Remember it can take time to reach an insurance settlement. If you’re not carrying a full coverage car insurance policy, a rental car probably won’t be covered.

If you owe money on your vehicle, chances are your lender requires you to have collision coverage. This type of car insurance will pay out the car’s actual cash value (ACV) in the case of an accident. Lenders require this type of coverage since it means they will still be paid even if you can no longer use the car, but be careful. If the ACV is less than you owe on your auto loan, you may still end up paying the balance out of pocket.

What happens when your car is stolen, or thieves break in, or there’s a flood, hurricane, or other weather emergency? Comprehensive coverage is car insurance that pays for losses that don’t involve traffic accidents. Consider how many valuables you store in your vehicle, and how you would pay for those things, or the car itself, if they were stolen. To make sure you could handle the financial fallout, look into getting a comprehensive car insurance policy.

Car insurance isn’t just about meeting legal limits. Think about how you would manage if the worst should happen, then get a policy that will make sure you are covered.

Photo via ganesha.isis

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