Very Cheap Car Insurance - It Exists But You Have To Know What To Ask For
Car insurance is one of the biggest expenses you'll pay as a driver. When you shop for insurance, you'll find prices ranging from about $20 per month to more than $100 per month. But how do you know which type of coverage is best for you and your budget?
In this post, we will explore different types of car insurance coverage that might be available to drivers such as liability or collision coverage. We will look at why these coverages are important for drivers, the cost associated with these types of coverage, and what they can provide in terms of driver safety and legal protection in the event of an accident.
Your Driving Needs Determine Your Coverage
Most drivers will want to consider liability and collision coverage when shopping for car insurance. In addition, add-on coverages like comprehensive and uninsured/underinsured motorist coverage are available. When you shop for car insurance, you'll need to consider the specifics of your driving needs, but you'll also need to understand what impact these different types of coverage can have on your premiums. Also keep in mind that most auto insurers offer a variety of discounts that may reduce the cost associated with car insurance.
Collision Coverage
If you have a collision deductible, the insurance company agrees to cover damage to your car up to the amount you've paid out for damages. Because collision coverage is your responsibility, most drivers don't want to pay more than they have to. As a result, for many drivers, collision coverage will be only a minor component of their auto insurance policy.
If you have collision and comprehensive coverage in place, both coverages are typically called "full" coverage if they include full physical damage protection (PDP) that extends all the way up to the value of your car. In other words, FPD may protect your car even if it is severely damaged beyond repair after an accident or stolen.
In addition, all collision and comprehensive coverage will typically include a loss forgiveness feature as long as you are a single policy holder. This means it will waive collision and comprehensive deductible amounts. Loss forgiveness is a powerful feature that can help cut your auto insurance premiums by up to 30%.
Liability Coverage
If you have liability coverage on your car insurance policy, you must be responsible for any damages that are caused in an accident. The law dictates the minimum level of liability coverage required in every state, but normally liability coverage is required to be at least $15,000 per person/$30,000 per accident/ $300,000 in total per incident (this is on top of regular collision or comprehensive coverage).
This coverage is used to pay for damages caused to others in car accidents where the policy holder is at fault. If you have an accident and you don't have liability coverage in place, you may find yourself on the hook for expenses that can quickly reach the tens-of-thousands of dollars. Your own costs will need to cover your medical expenses, lost wages, repairs, and any other related costs.
What's The Deal With Collision & Liability Coverage?
Collision and liability coverage are both designed to protect drivers who run into roadside mishaps such as a car accident or a pedestrian accident. Liability insurance covers accidents that involve the other party or parties in your vehicle (such as a car crash). Collision coverage helps with these types of accidents as well, but it may also cover issues like vandalism damage, and physical theft.
If you live in a state that is particularly high risk for car theft, collision coverage may be an extra cost you can add on top of your liability coverages to help protect your investment.
Collision & Liability Coverages and Discounts
The biggest discounts that drivers can take advantage of will typically be found in the form of a multi-policy savings discount. You can usually find this discount when you are looking at an insurance quote for multiple vehicles at the same time (such as 2 or more cars) or adding on additional home insurance policies for your residence.
Multi-Policy Discounts. Most auto insurance companies will grant you a discount on your premiums if you add new vehicle coverage to your existing policy. This is a great way to save money on your insurance premiums because it can cover any car in the family or vehicle that you have as an investment asset. However, you may have to wait several months before the company will approve this type of policy.
Additional Home Insurance Policy Discounts. Similar discounts can be obtained for adding additional home insurance policies to your existing vehicle policy. In most cases, this is a service that is offered by the insurance company as part of their package (not something added by another vendor).
Liability Coverage vs. Collision Coverage
There are two primary types of coverage that are offered by most auto insurance companies: liability and collision coverage. Both cover damages to your own car if you are at fault, but there are some differences. Here's a brief overview of what each type of policy covers.
Liability Coverage. Liability coverage is designed to help pay for damages the car has sustained as a result of an accident caused by the driver (whether he was at fault or not). If you are in an accident, and your car is damaged beyond repair, the policy will help pay for expenses related to that damage. Liability coverage may also cover legal fees, medical expenses, and so on.
Collision Coverage. Collision coverage is designed to cover accidents caused by other drivers or objects that hit your vehicle (from behind or from the side). Collision coverage will help you if your car is damaged in a strong crash or if your car is stolen after an accident. It also covers other types of unusual damage to a vehicle such as vandalism or physical theft.
The Relationship Between Liability & Collision Coverage
If you have enough liability insurance to cover the cost of your car, it can help cut out the need for collision coverage. (If you can't come up with enough liability coverage to replace your vehicle, however, it might be worth considering a small collision policy.) Here's why: if you have no collision policy in place, and you total your car (or it is stolen) without any liability insurance, your rates will spike. Your insurance company won't pay for damages because there is no collision coverage to take care of them. Because of this risk, drivers without sufficient liability insurance will have their premiums raised by as much as 300% or more.