How to Find the Right Level of Auto Insurance Coverage

You probably wonder if there is a magic formula to calculate the right amount of automobile Insurance cover. Wouldn’t it be great if you could just fill details about yourself, other drivers, your cars and a few other things and the formula tells you what to include in your policy.

In reality, there are many factors that affect vehicle insurance selection process. Couple of the most important factors are the policyholder’s opinion and personal circumstances. So, you will have to think about what are the risks involving vehicle ownership and driving on public roads. Your finances, the type of cars you own, where you live and work are some of the other considerations.

For example, if you simply haven’t got money to pay for premiums it would be understandable that you go for the minimum liabilities coverage. However, you may have to think again when your automobile is still valuable and you have no money to pay for repairs if something happens to it. You would lose it without insurance compensation and this may affect your business or work. So, you may have to try harder to find the money for comprehensive and collision coverage. When your vehicle is not worth much you may take the risk of losing it. Or the premiums may actually work out higher than its value.

Furthermore, some people are risk averse and like to insure against every possible and imaginable risk. On the other hand, some others may not have enough confidence in auto insurance companies and rather keep the money in their pocket. How you feel about the risk and your chances of getting paid following an insured loss can determine how you decide about the amount of cover you will buy.

If it helps you, about 70% of American motorists go for full coverage. If large portion of the US drivers choose the same type of coverage they may be onto something. When you have enough money you should buy the following covers; decent level of liabilities, uninsured motorist, collision and comprehensive coverage.

How to Find Most Affordable Car Insurance

Nonetheless, it is hard to ignore the fact that many vehicle owners are finding it hard to pay for insurance premiums. It is a fact that nearly 14% of drivers are uninsured in the United States of America. This is a worrying figure for everyone involved. Therefore, it is worth discussing how people can afford basic coverage, especially when they are have adverse conditions like recent claims, DUI or bad credit score.

One thing people should know that not buying insurance is a bad idea in many aspects. First of all, it is a legal requirement imposed on automobile owners that they should buy minimum car insurance coverage. Secondly, everyone has to think how they can possibly pay for the damages they cause to third parties and to their own automobiles. When you hardly have money to pay for the premium how on earth you will find large sums in case of claims?

The good news is that many states offer special concessions to help low income drivers afford auto insurance. When you are struggling to pay for the premium you should talk to your state insurance department. They have special arrangements with insurers to provide low cost coverage.

Share on Pinterest
There are no images.