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UPDATED: Mar 13, 2020
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The concept of value car insurance can be misleading at times, as some drivers confuse cheap car insurance with good car insurance that is inexpensive. Good car insurance coverage at a value price can be found, but it takes some work on your part. To find value insurance, you need to lessen your risk as a driver, do research on cars and insurance companies, and compare auto insurance quotes from many different providers.
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As with most things, knowledge is power when it comes to finding value car insurance. Your time and effort will pay off in both the short and long term. Finding the best insurance for the money isn’t always fast or easy, but you will be well rewarded for your efforts.
The first thing you need to understand is the difference between cheap insurance and value insurance. Cheap insurance is inexpensive, but it will likely not be enough coverage in the event of a loss from a crash, theft or other damages. Value insurance is also inexpensive, but it will provide better coverage if you have to file a claim for injuries or damages.
In the long run, cheap insurance will end up being much more expensive if you have an accident or other loss!
One way to get cheap insurance is to buy only enough to make your vehicle legal to drive. All states have laws and regulations that determine the minimum amounts of insurance coverage you have to buy. These limits refer to Bodily Injury Liability and Property Damage Liability. For example, the state of New Jersey requires drivers to carry no less than $15,000 per person and $30,000 for the total accident to cover injuries to those who are not at fault in an accident. The state also requires at least $5,000 to cover property damages caused by the at-fault driver.
Cheap insurance that is at the state minimums may not be enough coverage, according to the Insurance Information Institute. The premiums may be really low, but you will have a lot of costly liability if you cause an accident.
Consider this scenario with your cheap insurance: you caused an accident in New Jersey by sideswiping a van carrying two adults and three children. One adult had hospital bills from injuries that totaled $16,000 while the other adult’s bill amounted to $9,000. One child required extensive testing for a head injury that resulted in $24,000 in medical bills, and the other two children sustained minor injuries with a combined bill of $5,000. The family’s total bills from the accident that you caused amounted to $54,000. Your insurance will only cover $30,000 and you are liable for paying the rest of the bills.
Furthermore, there was $7,000 in repairs to the family’s van. Your cheap insurance will only cover $5,000, so add another $2,000 to the amount in which you are liable. Does $26,000 in restitution still sound like a good deal for insurance coverage?
The above scenario doesn’t even take into account your own medical bills or damages to your own vehicle. While some states require other insurance coverage, such as Personal Injury Protection, you likely don’t have enough coverage to pay for your medical bills or car repairs if you only bought the cheapest auto insurance.
Optional coverage such as comprehensive and collision may not be the cheapest option, but they will protect you and your assets in the event of a collision or other loss.
Having higher than state minimums of coverage along with buying optional coverage is a necessity in this day and age.
Your aim in finding value insurance is to have enough coverage at a reasonable price.
How to Lessen Your Risk as a Driver
Auto insurance companies are most concerned with your risk as a driver when they calculate your insurance premiums. They look at your prior driving history, noting any past speeding tickets, moving violations, or accidents. Such infractions will raise your insurance rates, making value car insurance hard to find. If you have a very poor driving record, then getting value insurance may be just about impossible.
The first step in finding value car insurance is to lessen your risk as a driver. It is not a quick fix or a fast path to getting value insurance, but it is really the only way; there are no tricks to finding value insurance if you have multiple tickets, accidents, or serious incidents such as a DUI.
To lessen your risk, you simply have to be a cautious driver.
Obey the speed limit, avoid reckless and distracted driving, and follow the rules of the road, such as maintaining a safe distance between vehicles and passing only on the left.
Over time, your driving record will improve, and you will be able to find value insurance because your risk is lower. Another option to speed the process up just a bit is to take a driving course that will take points off of your license; however, first make sure it is approved by your state’s Department of Motor Vehicles before you take the class.
Another way to lessen your risk is to improve your credit. Car insurance companies maintain that those who make poor financial decisions are more likely to make poor driving decisions. Thus, people with poor credit are at a higher risk for causing auto accidents, and they are charged higher insurance premiums. If you want value car insurance, then you have to improve your credit. Again, there are no quick fixes to improving your credit, but it will pay off in the long run.
Another factor that car insurance companies use to calculate your premiums is the vehicle that you drive. Statistically speaking, some vehicles are just more likely to be involved in accidents; making it more expensive to insure them. Some vehicles have higher premiums because they are more expensive to repair after an accident or they are more likely to be stolen.
All of these factors about your vehicle could make it harder to get value car insurance, so it is important to know where your vehicle stands.
Traditionally, sports cars, convertibles, SUVs, and trucks cost more to insure than sedans and vans.
Another factor is safety. Vehicles with high safety ratings minimize injuries to passengers in an accident or help to avoid accidents altogether. Either way, claims are lower for a vehicle with a high safety rating, so insurance companies assess lower premiums for safe vehicles.
Checking out safety ratings at the National Highway Traffic Safety Administration is a sure way to understand the safety of your vehicle or your next vehicle. Getting a safe vehicle is one more step in finding value car insurance.
Research Auto Insurance Companies
Another factor that affects the value of insurance is the customer service of your auto insurance company. Not all car insurance companies are created equal. Your auto insurance won’t seem like much of a value if you can’t get your claims paid in a timely manner. All car insurance companies claim to be customer-oriented, but the real truth comes out with customer satisfaction surveys.
JD Power and Associates conducts yearly surveys of actual customers to create annual consumer ratings for car insurance companies. The surveys assess a wide array of topics, from the ease of getting coverage, to prices, to getting your claims paid quickly.
Knowing which companies have the best track records in terms of customer service will allow you to find value insurance that is worth every penny.
Another important factor for finding value insurance, regarding the actual car insurance company, is to look for a company that is financially sound, according to the National Association of Insurance Commissioners (NAIC). You can view the financial ratings at a credit-ratings agency. Your best bet is to go with a ratings agency that is designated as a nationally recognized statistical rating organization by the U.S. Securities and Exchange Commission, such as Standard & Poor’s, Moody’s, Fitch Ratings, and A.M. Best. An auto insurance company that has a poor financial standing may not even have the money to pay your car insurance claim, especially if it one of many as the result of a catastrophe such as a tornado, hurricane or flooding.
Compare Auto Insurance Quotes
The last and best way to find value car insurance is to compare many car insurance quotes at one time. This allows you to see the high and low end of the spectrum, and then look to reviews and ratings to find a customer oriented, financially strong insurance company from the pack.
Of course, this step is most effective if it is completed after you have cleaned up your driving record and credit to the best of your ability and purchased a vehicle with high safety ratings. A high-risk driver with an unsafe car will likely just have many high quotes to compare.
There are many ways to compare quotes, but some methods have advantages over others. For instance, you could go all over town to get a quote from each car insurance company with a brick-and-mortar store. On the other hand, you can get out your telephone and phone book and call all of the insurance providers listed to get quotes.
However, the quickest and easiest way to get multiple quotes for comparison purposes is to use a car insurance comparison site. After filling out some information, multiple car insurance companies will contact you with their rate quotes.
Find out how easy it is to get many car insurance rate quotes by inserting your ZIP code into the FREE box on this page right away!