Getting cheap auto insurance - a handy manual

The first question that needs to be answered is – Is it even possible to get cheap car insurance? The answer is yes! The car insurance industry, like most, is riddled with technical exceptions, as well as widely varying products. If you understand the nuances of the industry you will be able to quickly and significantly lower the rate you pay for car insurance. Here are a few guiding principles on how you can alter your coverage amounts so that the car insurance ultimately works out 'cheap' for you.

First, you need to know the types of coverage that your insurance policy must or may include. These may change from one state to another. A list of most popular ones is given here.

Liability - This is a mandatory coverage that protects you when you are at fault in an accident. It pays for what damage you do to other people's car or property, their medical bills as well as any 'pain and suffering' arising from the accident. Here 'cheap' would be mean that you buy only the minimum coverage dictated by the law of your state. For Instance New York requires a minimum liability of $25,000 for one person injured in the other car, $50,000 for all parties injured in the other car, and $10,000 car or property damage due to an accident.

Collision – While this may not be mandatory, it may be wise to take this coverage. It helps you repair your own car when it is involved in a collision accident – you fault or not. The insurance company will not pay you more than your car's book value therefore to get cheap coverage make sure that you purchase collision coverage of no more than the vehicle's current book value. This can be further made 'cheaper' by increasing your deductible if you think that the probability of you being involved in this kind of accident is rare. Your deductible is the amount that you agree to pay for getting your car repaired before the car insurance company pays anything.

Comprehensive - This coverage cover you if your car gets damaged by anything other than collision like, fire, vandalism, theft or even by animal hit on the highway. Again you can lower or eliminate this coverage and in so doing reduce your car insurance bill.

Personal Injury Protection – This pays your and your passengers' hospital bills. This amount can be higher or lower depending on coverage limit and deductible.

Uninsured and Underinsured Driver – If the other driver in the other car is either underinsured or even uninsured, your own car insurance can pay for damages done to you, your passengers, and your car. This amount again can vary according to the area where you live or the localities where you drive.

By Jill Quinn


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