Cheap Auto Insurance

Basics of Cheap Auto Insurance

Although auto insurance is legally required, most people do not like paying for it. As a result, many simply do not purchase insurance. This is not recommended. Fortunately, there are inexpensive alternatives available to drivers. Purchasing cheap auto insurance is no different than buying anything else – there is basic information you should consider when selecting a policy.

Mandatory Coverage

Regardless of where you live, at minimum, third party liability coverage is required when you own a car. If you cause an accident, this coverage will pay for the damage and medical expenses of the other party. Your expenses are not covered if this is the only coverage you have. The state in which you reside determines how much third party liability coverage you must purchase. If you do not meet state minimum requirements, you are breaking the law.

Optional Coverage

Any type of coverage beyond that required by the state are considered optional. This means that you can save quite a bit of money if you do not purchase additional coverage. However, there are benefits afforded by this additional coverage. Collision insurance can cover damages to your vehicle and pay your medical expenses if you are involved in a car accident, even if you cause it. This reduces out-of-pocket costs on your part which can be catastrophic if the accident is severe enough.

Deductibles

A deductible is included in every auto insurance policy. This is the amount of money the insurance company will not cover. You have to pay this amount yourself before your coverage becomes active. After your deductible is paid, your insurance company will pay the remaining costs associated with the claim. Insurance companies require deductibles to discourage drivers from filing claims. The belief is that if you have to pay a certain amount of your own money toward a claim, you will be less willing to file a claim in the first place. You should know that if you pay a low premium, your deductible will be higher.

Having a full understanding of the basics of cheap auto insurance helps you understand your options so you are able to select the policy that is right for your situation. If you are in the process of purchasing a car or have a car loan, you may have additional coverage requirements that you need to consider. Fortunately, it has never been easier to shop around for car insurance. In fact, you can get cheap auto insurance quotes from multiple insurance companies so you can easily compare policies and rates.

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