Cheap Auto Insurance

The car insurance premium you are approved for may be tantalizingly low, but cheap car insurance almost always means that there are extra fees, a large list of non-covered items and circumstances, skimpy coverage, etc. The following are some common ways low cost auto insurance companies provide such low auto insurance rates:

• Vehicle Value: The valuation of a vehicle may be standard – most insurers and lenders use Kelley Blue Book values or some other such service. Who is to say if a vehicle is in “fair” or “good” condition? Low cost car insurance companies may devalue your vehicle in order to offer you a lower car insurance premium – do not be fooled. If your vehicle gets totaled, your car insurance company will only pay the value listed; so, if your car insurance agent lists your vehicle as being worth $5,000 and bases your premiums on this, even if your car is worth $11,000, you will receive no more than $5,000 if your car is totaled.

• Waiving Coverage: Some low cost auto insurance companies will have you waive coverage instead. For example, in states like Pennsylvania, tort coverage (coverage for you, the driver; includes damages to your own car and personal injury costs) can be waived. While waiving your tort coverage may be a sure way to a lower car insurance premium, doing so also removes your ability to claim compensation if you are the victim of an accident.

• Liability Levels: Some auto insurance companies will offer cheap car insurance premiums by manipulating your liability levels as well. Liability coverage protects you financially if you are in an accident; liability covers the amount for which you are liable. While each state has its own minimum levels for liability coverage, advisable liability levels are often much higher; if you do get in an accident and do not have enough liability coverage to cover the damages (and lawsuit), the burden falls to you personally.

• Comprehensive Coverage: Comprehensive coverage is a sort of catchall; it covers you if you have hail damage, vandalism, or a tree falls on your car. Low cost auto insurance companies also frequently do not provide comprehensive coverage on your vehicle in order to be able to give you a lower quote. Hidden Charges: Lastly, keep in mind that it is also not uncommon for there to be hidden fees and charges within your cheap car insurance policy.