Cheap auto insurance is a temptation that doesn't always coincide with your best interests. When shopping for coverage, it's important to consider more than price. Often, an inexpensive insurance plan is priced that way because it doesn't offer the full range of coverage that you need. In years prior, cars weren't as advanced as they are today, and these advancements in auto technology have changed the standards for car insurance. We'll outline two critical factors to consider when shopping for insurance, beginning with the degree of coverage.
Degree of Coverage
The degree is important because it determines the coverages extended to you and the monetary limits of those coverages. Most states require motorists to carry a minimum amount of liability to drive legally, but the purpose of insurance isn't to appease the state, it's to protect your assets. Cars are getting more expensive, with the average price of one purchased new in 2019 being about $37,000 and used cars coming in slightly better at about $20,000. However, the minimum amount of coverage can leave you under-insured and paying any excess out of pocket.
It's important to note that even if your vehicle is on the inexpensive side, accidents are typically multi-car. This adds a number of variables, a few of which are fault status, the type of vehicles involved in the accident, the number of passengers, and the severity of any injuries or damages. These variables come with price tags and the minimum may not cover you completely. Further, there are more factors to consider and it's up to us to make sure we're adequately prepared for these instances. This brings us to types of coverage.
Types of Coverage
There's more to insurance than basic liability. It's possible to bolster your plan with Personal Injury Protection (PIP) and Medical Payments to Others (Medpay) to help cover problems arising from high medical insurance deductibles. Some medical insurance plans have dollar amounts that you have to pay first before they offer financial assistance, and the proper coverage on your auto insurance can mitigate that obstacle. In addition to PIP/Medpay, some auto insurance providers offer Uninsured Motorist and Underinsured Motorist to cover you in case the other party is driving without insurance or has a plan that doesn't have the degree of coverage necessary to reimburse you.
The points mentioned above are just the beginning. There are many other coverage types available to you and it's key to perform due diligence while you shop. We know the legalities can be overwhelming. If you need additional help, please, contact us today to learn more.