March 22, 2012

Managing The Limits On A Cheap Car Insurance Policy

A cheap car insurance policy can save a household hundreds of dollars per year in premiums, but many drivers sacrifice their coverage in order to keep their rates low. A cheap policy might have a high deductible or policy language that makes making a successful claim a difficult process. Drivers who want to keep premiums as low as possible should carefully look at coverage limits and deductibles to make sure that the overall value of an insurance policy is high, and likewise, they should avoid poor policy decisions that could limit the value of a car insurance policy.

Before buying cheap policies, drivers should look at their insurance limits carefully. Many drivers lock in cheap car insurance policies by raising their deductibles and lowering their limits, but this is often a risky way to buy insurance. A high deductible could make a policy effectively worthless if a driver ever needs to make a claim. Likewise, low limits will affect payouts. A driver should generally look for collision and comprehensive insurance coverage that are in line with vehicle value. If a driver has an extremely inexpensive vehicle, collision and comprehensive insurance coverage is often unnecessary, as the money that the driver will pay in insurance premiums will exceed the value of the vehicle in a total loss claim.

Drivers often choose the lowest available liability insurance limits to get cheap policies, but again, this is a risky tactic. Low liability insurance limits are often quickly exhausted in a major accident. Again, it is important to consider driving habits and vehicle type when choosing liability limits. Drivers who spend a lot of time on the road should look for policies with fairly high liability insurance limits. However, drivers who don't spend much time in their vehicles can responsibly lower their liability limits. The same is true of personal injury protection and other optional coverage types. Before changing any limits, drivers should absolutely look at each type of coverage to make sure that the new limits and deductibles won't sacrifice essential coverage.

Another way to keep car insurance premiums low is to compare insurance costs online before making changes to limits and deductibles. In many cases, a driver can avoid lowering coverage simply by looking for quotes from a few different insurance providers. Many insurers also offer discount programs, which can provide additional relief for drivers with rising premiums. Drivers should use coverage limit changes as a last resort, as it is always important to keep essential coverage to stay protected on the road. By using every available resource including online insurance comparison tools, drivers can keep great coverage while still guaranteeing a cheap car insurance policy.