Why Car Insurance Is Necessary

As people are looking for ways to save money, insurance costs become a concern. Don’t cancel your auto insurance.  This vital coverage is a necessity for three key reasons.

Every state in the country has laws requiring drivers to have auto insurance! or proof of financial responsibility. Auto insurance is always the best answer unless you happen to have a large bond or securities registered with your state’s treasurer. State laws vary, but in the following selection of states, you must have these amounts set aside to cover a vehicle accident.

• California - $35,000
• Michigan - $60,000
• Missouri - $60,000
• Ohio - $30,000

Medical bills are extremely expensive. On average, a trip to an emergency room for something as simple as a broken arm averages $2,500. Few people can afford to pay for an expensive ER visit out of pocket. Insurance helps by paying for necessary medical care.

Finally, damages to your car following an accident are just as expensive. Auto body repairs may seem easy, but a simple dented bumper and hood that pops out of place can cost an average of $1,200 to repair.

Always Compare Quotes

Many people fail to compare quotes every six months when their auto insurance policy is up for renewal. Auto Insurance Company quotes vary greatly. It is critical to compare quotes and see which company can give you the best rate.

You’d be surprised at how fast things change. While one company might be the best deal right now, six months later, they could be the highest. Many companies lure you with low rates to start and then quickly raise them to make a profit.

Are Low Deductibles Worthwhile?

What are the odds you will be in an accident? With a low deductible, you spend more so that when an accident occurs, you get more money from the insurance company. A low deductible ensures that you pay little to nothing if an accident occurs. Meanwhile, a higher deductible costs less, but you pay more you’re your own bank account if you are in an accident.

Video: Bad Accidents Caught on Camera

If you are a great driver with no accidents, you might benefit from raising your insurance deductible. While you can pay for a low deductible, if you never make a claim on your insurance, you’re wasting money.

State Minimums

Every state has laws regarding minimum auto insurance coverage amounts. For example:

• Alaska: $50,000 (bodily injury per person), $25,000 (property damage)
• California: $15,000 (bodily injury per person), $5,000 (property damage)
• Florida: $10,000 (bodily injury per person), $10,000 (property damage)
• Texas: $25,000 (bodily injury per person), $25,000 (property damage)
• Vermont: $25,000 (bodily injury per person, $10,000 (property damage)

It is very possible that this amount wouldn’t cover the true cost of an accident. When an accident is your fault, you may wind up with an expensive lawsuit. Medical bills might exceed the minimums. It’s important to consider how much auto insurance coverage you really need.

Checking For Discounts

Video: What You Need to Know About Car Insurance

Most importantly, look for discounts to help save you money. Auto insurance companies offer a range of discounts, but they don’t always inform customers about them. It pays to ask!

Common insurance discounts include:

• Defensive driving: Taking defensive driving courses can lower rates, especially for the elderly.
• Employment discount: Certain professions, such as engineering or teaching, statistically have safer drivers
• Equipment: Things like anti-lock brakes and air bags lower rates
• Good grades: High school and college students with excellent grades receive discounts
• Military Service: Serving in the U.S. military entitles you to a discount
• Multi-policy: Having more than one policy, such as homeowner’s insurance and auto
• Multi-vehicle: Having more than one car, truck or motorcycle
• Parking: Parking in a locked garage can lower rates
• Safe driver: No accident in a specified time frame
• Security: Having alarm systems lowers your rates
• Senior: Those 55 and older may qualify for discounts

You’d be surprised at how much money you can save by following these simple tips. Remember to shop around at every renewal and never be afraid to ask for discounts!

Big Name Car Insurance Companies

AAA
1-800-222-3612

AARP
1-877-422-2345

Allstate
1-877-812-0003

Esurance
1-800-ESURANCE

Farmers
1-800-FARMERS

Geico
1-800-861-8380

The General
1-866-519-7422

Liberty Mutual
1-800-837-5254

Nationwide
1-866-835-7572

Progressive
1-877-PROGCOM

State Farm
1-877-734-2265

Travelers
1-888-695-4625