Every car owner is legally required to have insurance, but this creates a bit of a dilemma in terms of the amount of cover you should buy.
The temptation is to go for the bare minimum, simply to save a few dollars. But does taking the budget-conscious approach always make sense, or is paying extra for additional protection worthwhile?
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Understanding your obligations
There are some regional differences in the level of car insurance you require, and if you’re aiming to manage your money better, there’s no question that sticking to the lowest level of cover required by law is cheapest in the short term.
However, the issue of how much insurance you actually need is a different matter. It’s about balancing risk against what’s comfortable as well as what’s affordable.
Say you need your car for commuting every day. If it was involved in a crash or was stolen, and your insurance didn’t cover the cost of replacing it, then it wouldn’t just be a financial burden, but would also disrupt your professional life.
Even if you’re adapting to remote working, owning a car is still linked with personal freedom. Having basic insurance exposes you to all sorts of inconveniences in your personal life.
Appreciating the risks
Each year, tens of thousands die and many more are injured in road-based collisions. This is a stark reality all drivers must face.
Meanwhile, average auto repair costs are close to $400, and fixing major issues after an accident is even more expensive.
You need to see car insurance in the context of the risks you face behind the wheel. If more cover gives you peace of mind, this could be worth the price alone.
Getting cheap auto insurance
You can narrow down which insurers to go with if you want cheap auto insurance, and this is very much the ideal solution to the conundrum outlined above.
‘Cheap’ should not be confused with ‘inadequate’, because the competitive nature of the auto insurance sector means that there’s always room for discounts to be found and competitive price undercutting to take place, in favor of the consumer.
Likewise, when you’re sourcing quotes from several vendors via online comparison tools, you can filter your results according to the level of cover you require.
If you only want the legally mandated amount of protection, that’s fine and dandy. But if you’d rather pay more to protect against a longer list of potential catastrophes, that’s also possible.
Better yet, you could discover that there are providers out there who’ll give you a comprehensive level of car cover, without charging you over the odds. So you could save compared with your previous package, and even increase the cover available in spite of paying less.
Knowing when to make a change
People tend to base their car insurance choices on past experiences, as much as anything else. If you’ve had to make a claim in the past and felt the benefits of not needing to pay the full costs for repairing or replacing a written-off vehicle, you will probably be more inclined to get a more all-encompassing policy later on.
If you’ve not had the misfortune of needing to call on your insurer to help you out, the prospect of keeping costs down might outweigh all else.
Most importantly, don’t just settle for whichever insurer and policy you’ve had for a while, but regularly see whether a better deal is available elsewhere. Even if comprehensive insurance isn’t on the cards for you, price comparison is your friend.