If you are concerned about the cost of your premium, make sure to keep the deductibles high. This will lower your premium and you should use money out of your own pocket to pay for routine repair costs. For instance, if your deductible is $400, it does not make sense to rely on your auto insurance policy to pay for something that costs $390.
Rarely Should You Have Minimum Coverage
It is usually not recommended to drive with the minimum auto insurance. Liability auto insurance is considered one of the best deals in the insurance world with regards to how much coverage you will receive compared with your monthly premium. However, driving with minimal auto insurance is better than driving with no insurance and is also the only legal way to drive. If you do not have a lot of assets, you may wish to drive with minimum insurance because you will be judgement-proof. This means that even if you were taken to court, you would not have any assets to take.
Know The Total Value Of Your Assets
Be aware of the total value of your assets. This will include any other vehicles you may own, the value of your home and even expensive jewelry or collectibles. These are the assets that you could potentially lose if your insurance does not cover all of the costs that resulted from the accident.
Is Your Car Worth Insuring?
You will want to make sure that your auto insurance will be able to pay for the entire value of your car if necessary. One exception is if you are driving an expensive car and you would be willing to replace the car with a less expensive car if the original is totaled. If you are purchasing an old car, it is likely unnecessary to have your car covered even if you can afford it.
One thing to keep in mind is that car insurance is often not that expensive compared with other fixed expenses, such as health insurance, house payments, and car payments. As your income rises, there is very little reason not to purchase the maximum level of insurance because you will not see a significant increase in your insurance premium. You may only need to pay an extra $100 a year. This is small compared to the hundreds of thousands of dollars you may be paying for damage to both vehicles involved in the accident and medical expenses.
