One of the automatic expenses that comes with owning a car is auto insurance. Most states require you to have insurance to drive legally, so it isn't worth risking it to let your policy lapse. However, if paying for the insurance is an issue, you can ask your agent to help you come up with a plan that reduces your costs as much as possible. You'll at least have to meet the minimum requirements of your state, but you may be able to reduce your coverage, especially if you drive an old car that isn't worth much. Here are some things to consider when you buy a car insurance policy for an old car and you want to save money.
Liability Insurance Pays When An Accident Is Your Fault
Liability insurance is the type of insurance that most states require by law. This insurance kicks in if an accident is your fault. It's important coverage to have, since it could prevent you from being sued. You need it even if you drive an old clunker, because it provides coverage to people and their property in case you're responsible for the accident. Even though you want to save as much money as possible, it's a good idea to follow your agent's advice when it comes to getting liability insurance. Even though the minimum is set by the state, it may be risky to drive with minimum insurance. If the insurance doesn't cover the damage you caused, you could still be sued and lose your home or even have your future earnings affected.
Collision Insurance Covers Repairs For Your Car
You may be able to cut corners on collision insurance if you have an old car that is paid off. If you have a loan on your car, the lender may require you to have enough coverage to pay off the car if it is damaged. However, when your car is paid for, you may be willing to risk carrying lower collision insurance. This insurance pays to repair or replace your car when it is in an accident or if you run into a tree or some other object. If you carry a low amount of insurance and are involved in a wreck, you could get stuck paying repair bills out of your pocket. However, this could be a risk you're willing to take if your car isn't worth much anyway.
Comprehensive Insurance Protects Against Theft
Comprehensive insurance is coverage for things like storm damage and theft. Your lender may require this too if you're still paying off your car. If not, and you're trying to slash your auto insurance bill, you may want to go with a low amount of comprehensive insurance and hope your car is never stolen or damaged by a natural disaster.
Uninsured Driver Coverage Could Cover Your Medical Bills
This type of insurance may also be required by your state. It protects you when you're in an accident with another driver who doesn't have insurance or who has minimal coverage that doesn't cover your expenses. This could come in handy if an accident is caused by a driver with few assets who would not be worth the expense to sue for damages. Even if you don't care about having money to repair your car, remember, if you're in an accident, you could have expensive medical bills to pay for. For that reason, you don't want to only consider the value of your car when deciding if paying for uninsured driver coverage is worth the expense.
Remember, you still need good auto insurance even if you drive an old clunker that isn't worth much. That's because the policy pays for medical bills for you or the people you injure. Plus, it pays for damage to property and someone's expensive car when an accident is your fault. Be sure you understand the areas where you need more than minimum coverage and the areas where you can skimp to save on costs.
When it comes to auto insurance, finding the best coverage for your needs isn't always easy. One of the things I do when I shop for car insurance is compare rates. As a concerned consumer, I want a rate that fits my budget throughout the year. I also want coverage that offers discounts, tips, and benefits for good drivers, such as easy-to-file accident claims and car rental services. I travel a lot, so I need services that make life easier for me. If you want to learn more about auto insurance, read my blog. You'll find tips that save you time and money.