All car owners are legally required to have liability insurance in their auto insurance package. In fact, in many states this is the only mandatory component. That is why you should be extra careful when buying a policy. Here is some essential advice on how to get properly insured while keeping your costs down.
Understanding Coverage Components and Limits
Liability insurance is designed to pay for the property damage and bodily injuries that you could cause to other people (third parties) in case of a car accident. It is important to note that limits apply to these two factors individually. There are three limits in total which you must be well aware of when buying car insurance. These are:
– Property damage coverage limit – This is the maximum amount that the insurer will pay out in case you’ve caused damage to other people’s property.
– Bodily injury coverage limit per person – This is the maximum individual compensation to each victim of an accident.
– Bodily injury coverage limit per accident – This is the total amount that the insurer will be required to pay as compensation to all people injured in the accident.
There are minimum legal requirements for each limit set by the state, but they are not very high. If you are using an auto loan to purchase a new vehicle, the lender may also set their own requirements which you must adhere to when buying liability insurance.
Deciding on the Optimal Amount
It’s natural for every buyer to want to get the cheapest auto insurance there is, but price should not be the only factor when deciding on the coverage amount. If you don’t get proper protection, you may end up paying thousands of dollars out of your pocket. That is why your best bet is to buy as much liability insurance as you can afford and use the saving methods shared below.
Top Ways to Reduce Your Premium
Check your credit score before you go on the hunt for a cheap car insurance policy and have any errors corrected in advance. This is important since this score can affect your premium. The more you can improve it, the better.
Shop around to find the best deal. Just make sure that you compare only auto insurance quotes from leading companies. They should have excellent ratings and reputation. This will give you peace of mind that in case of an accident, everything will be sorted out quickly and without hassle.
Check what discounts you are eligible for and calculate how much you can save with them. Currently, one of the most popular options is to bundle your car and home insurance policies or only the liability covers. This is how you can bring down your cost considerably. Just make sure that you read carefully all terms and conditions before getting such cheap insurance.
Finally, you should watch out with reducing your liability insurance premium by increasing the deductible. Make sure that you will be able to pay the latter straight away in case of a claim. This is how you will be able to make the most out of your cheap auto insurance.