In today's economy, most people need to save money wherever they can. Many will look for ways they can cut down on the cost of their car insurance premium, so they look for the cheapest options available. Here are three things you need to keep in mind when shopping for cheaper car insurance.
1. Every state has its own laws regarding minimum coverage - but it may not be enough coverage.
When you are looking to cut costs for your car insurance policy, you need to be sure you are still compliant with your state's law regarding minimum coverage. For example, if you live in the state of Tennessee, the minimum coverage you need a policy for is 25/50/15. That means the policy will pay up to $25,000 per person you injure in an accident, with a maximum of $50,000 total for everyone injured, and up to $15,000 in property damage.
While it is good to save money by reducing your amount of coverage, you need to be aware that doing so can increase your odds of being sued if you cause an accident. Using Tennessee as an example again, say you you reduce your coverage to just the minimum amount required by state law. If you then cause an accident and another party sustains injuries that requires more than $25,000 in medical bills, they can sue you for the remaining amount.
The same is true for the property damage minimum. In Tennessee you just need coverage for $15,000. Most cars these days cost more than that, so if you total someone's car and it's worth more than $15,000, they will likely sue you for the rest.
You need to find a happy medium between reducing your car insurance premium costs, making sure you are compliant with state law, and ensuring you are better protected legally in the event of an accident.
2. If you have your car financed, your lender may require you to carry more insurance than the state does.
Another thing you need to keep in mind when shopping for a cheaper car insurance policy is the requirements of your car loan lender. While most state law only requires you to carry liability car insurance, you likely will need full coverage if you have your car financed through a lender. That means not only will your policy pay for damage you cause to other people's cars, but it will also cover your own car in an accident.
The reason lenders require full coverage is quite simple: to protect themselves. If you cause an accident and you total your car, you wouldn't want to keep paying monthly payments on a car you no longer have. If you have full coverage insurance, the lender will get their money back for the car and you won't have to worry about paying a car payment on a car you totaled in accident.
3. Consider bundling your car insurance with other insurance policies.
Another way to save money on your car insurance policy is to bundle it together with other policies, such as your homeowner's or renter's insurance. Most of the major car insurance companies also carry insurance for other things, and they usually give discounts if you buy your different insurance policies from them.
Not only can bundling your insurance policies help you get cheaper car insurance, but it can also make paying your monthly bills much easier. Instead of having several insurance bills every month, you can combine them into one payment.
For more information, contact Green Light Auto Insurance Specialists or a similar company.