Auto Insurance — When You Really Don’t Need A Great Policy

At any point you want to buy an auto insurance policy, you have to take one of two options: The most adequate coverage or the cheapest. Yes, there are really times when you don’t need the most “adequate” coverage.

Auto insurance is one policy where the law makes it mandatory that you have one even when it might NOT serve your interests best. If you find yourself in such a situation, all you need is the barest minimum.

I’ll show you an example and also show you how to do it without putting yourself at risk…

An old car with comprehensive and collision coverage won’t do you any good. The only exemption to this is if yours is a classic (But that’s another issue).

To determine what you get as reimbursement when you file a claim, there’s a convention that is used to determine your vehicle’s value at the time (Kelley’s Blue Book Value). Experience has shown that once your car is old, it doesn’t have much value. This means very little or NO reimbursement irrespective of how much your coverage is.

This means then that getting the most extensive coverage for your old car won’t do you any good.

Now someone may argue that you also need to protect yourself properly from liability claims. Yes, you need to. But there’s a better way to do it…

If you want more coverage from liability claims per dollar spent on premiums, then the only way to go is buying an umbrella policy. The best part of this policy is that it will give far better protection from the weirdest of claims for very little outlay.

It could cost a 35-year old man in an area like New York City around $300 extra to raise his auto bodily injury liability coverage from $25,000/$50,000 to $100,000/$300,000. However, with an umbrella policy, he’ll spend less than that to get $1 million worth of coverage. Furthermore, he could make it $2 million by just paying only about $75 more.

To sweeten it all, an umbrella policy will take care of any other liability claims arising from, say, your home (You’ll do well to get details from your agent).

That said, you must still get at least the minimum required by law. And since you just want to keep the law, look for the cheapest offers. That way, you’ll only pay for what you need — Staying law abiding. Just make sure you do NOT need to file claims for your vehicle before going with this option.

If you want to save even more without putting yourself at risk, take some time out to do extensive comparison shopping. Get and compare quotes from a wide range of reputable auto insurance quotes sites.

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