Most of us love a great bargain, but car insurance is not one of those things where the low dollar bid often wins out. It's helpful to compare cheap car insurance to other options that may cost a little more, in order to see which policy is really the better bargain. Here are some ways to do a quick car insurance rate comparison.
Does the Plan Offer Robust Liability Coverage?
All auto insurance plans have to include the minimum liability requirements set by the state where you registered the vehicle. The problem is that, mainly due to inflated health care costs, these limits often do not cover the entire cost of an accident. The state may require $30,000 in bodily insurance coverage, but if you are at fault in an accident where the victim sustains more than just minor injuries, the costs can balloon to well beyond $50,000. That's why many experts recommend choosing a $100,000 bodily injury limit. Your cheap auto insurance policy may only have a $30,000 limit, which will get you lower premiums, but not full coverage in some accident scenarios.
Does It Include Uninsured and Underinsured Motorist Coverage?
Most insurers are required to inform you about how this kind of coverage protects you if you are hit by an uninsured driver. Some states recommend this coverage, and some don't. Your cheaper auto insurance plan probably does not include this policy addition, but you may want it added on.
How Does My Cheap Auto Insurance Value My Vehicle?
Check to see if your cheaper auto insurance policy has any collision or comprehensive insurance. Minimum liability insurance does not cover any damage to your vehicle at all. In order to protect your investment in the car or truck you've bought, you need to select collision and comprehensive coverage, which will add more costs to your premium. You'll also want to see how the auto insurance company values your vehicle. Most of them use actual cash value or ACV. However, this may differ from the Kelley Blue Book value, so do a quick check and see if your cheaper insurance rates have to do with a downgrade to your vehicle's value, in which case the company will not want to pay out much if you wreck your car.
Does the Cheap Auto Insurance Take Safety Features into Account?
Another important consideration is whether or not the auto insurance company gave you credit for driving a car equipped with the newest safety and security features. If you have a car or truck with anti-lock brakes, additional airbags or any other safety features, you may be entitled to auto insurance savings. Check to see whether your plan has included specific endorsements that show how they discounted your insurance for safety features that are shown to prevent some kinds of accidents.
These are some of the main ways to compare auto insurance to see if your cheap auto insurance plan really measures up, or whether it's really a hollow bargain that may cost you more down the road.