For many, getting car insurance is a matter of finding the cheapest, minimal coverage that they can legally get. While this may save you money, this may not do anything to protect you financially in the event that you’re in an accident or need to file a claim. Let’s take a look at how getting the right car insurance is critical for your finances.
Minimal Coverage Doesn’t Offer Much Protection
Minimal coverage, which is typically the coverage that is required by your state in order to legally drive your vehicle, doesn’t offer a lot of protection if you get in an accident. In Florida, for example, the minimum for property damage is $10,000. In an accident, $10,000 is easily exceeded if you hit just one brand new car.
You’re on the Hook for Anything Insurance Doesn’t Cover
If the damage you cause in an accident exceeds the limits of your insurance policy, you’re on the hook for the difference. This can mean a lawsuit, for which you may also be responsible for the costs. In some states, your license can even be suspended until you pay it off. This can affect your job, your home, and your family’s financial security.
Higher Deductibles May Not Save You Money
Opting for a higher deductible in exchange for a lower premium often seems like a great way to save money. However, while this does save money on the premium, it’s important to consider the ramifications if or when you need to file a claim. A higher deductible means that you have to pay cash out of your own pocket and the insurance company will cut you a check for the difference. This can result in filing a claim that doesn’t really get you much money, but will likely result in an increased premium. Alternatively, you’ll find yourself not filing claims at all and just paying out of pocket because of the deductible. In either of these cases, you’ll end up spending more due to the high deductible and making the lower premium a moot point.
Comparison Shopping Can Get You the Best Coverage and Deal
The best way that you can ensure that you get the right amount of insurance, and still save money, is to work with an agent, like those with United Security Agency if you’re looking into a car. Insurance agents have multiple companies that they can get quotes from, so they can help you comparison shop between the companies. They can also provide insight into what different coverages mean, how much you may want to consider having, and if there are any you could skip (such as comprehensive if you own your car outright).
You care about saving money on car insurance, and you should. But don’t prioritize saving money now over the possible financial consequences in the future if you don’t have enough coverage. Look for the right balance between saving money today and protecting your financial future.
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