Get the Facts on Bare-bones Auto Coverage
They say you get what you pay for – but do you really? When it comes to buying bare-bones or cheap auto insurance, there is a lot of confusion. Should you save money by purchasing the least expensive policy possible, or is there a real reason to invest in the best policy money can buy?
What about high deductibles? Does it really pay to save money if you don’t have the coverage needed in the event of an emergency?
Following are some of the facts and fiction about bare-bones auto insurance:
Fiction: High deductibles are always a great way to save money.
Fact: Increasing your deductible can lower rates but should be done with caution. Unless you have an alternative means of transportation and enough money in the bank to cover the out-of-pocket expenses, opting for a higher deductible might leave you stranded when you need reliable coverage most.
Fiction: All auto insurance policies are more or less equal.
Fact: Auto insurance policies differ dramatically on coverage options. Many ultra-low-cost policies fail to cover important items like medical expenses, or they may leave you high and dry if the other driver doesn’t have coverage. On the other hand, it’s often possible to reduce premiums by purchasing only the policy options specific to your situation. For example, if you have reliable medical insurance provided by an employer, that portion may not be as important to you as it would to someone without health insurance. Always speak with your agent about the best policy options and alternatives.
Fiction: Cheap auto insurance is impossible to find and undesirable.
Fact: Insurance underwriters are becoming increasingly creative in serving the needs of clients, including new forms of temporary policies, ultra-low-mileage options and other alternatives that can dramatically reduce prices without sacrificing the quality of coverage.
For example, limited-use policies, carpooling, extended travel and business-use alternatives are just a few choices to consider for special situations or driving needs. Ask your agent about special programs.