Car Insurance 101: Why State Mandated Minimum Coverage May Not Be Enough

Car insurance is an important purchase, so important in fact that state governments around the country have passed laws requiring every driver to buy it. Forcing every driver on the road to carry car insurance expands the risk pool and this can lower the cost of car insurance for every driver. Mandatory car insurance also minimizes the chances that you will be involved in an accident with a driver who has failed to purchase car insurance. Many states tie car insurance to vehicle registrations and purchases, making it harder for drivers to avoid buying the coverage they are required to have by law.

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But while minimum mandated coverage is certainly important, it might not be enough to truly protect you in the event of a crash. It is important for all drivers to look at the minimum amount of liability insurance and property damage coverage required by their states and determine if that coverage is really enough to protect themselves, their families and their vehicles.

For instance, in some states the minimum amount of property damage coverage drivers are required to carry is as low as $5,000. To understand just how inadequate that limitation really is, just take a drive and count the number of vehicles you pass that are worth more than $5,000. If you were to be in an accident with any of those drivers, you would be wholly unprotected if all you bought was the minimum insurance coverage dictated by your state government.

Liability coverage is another important area to consider when looking at the minimum amount of coverage your state requires. Again, many states have set the bar very low in this regard. The states generally do this for valid reasons, namely to make car insurance more affordable to drivers who are forced to buy it, but those low premiums can come at a steep price.

It does not take many doctor visits or days in the hospital to run up bills in excess of those limits, and you could be on the hook for the excess in the event of a crash.

When determining how much insurance you truly need it is a good idea to look at the minimum mandatory coverage required by your state as only the starting point. If you are a young driver with little in the way of assets to protect, you might be able to get away with the minimum mandated coverage for awhile, but as you accumulate more assets it is a good idea to revisit this decision and make any changes that are warranted.

One of the best ways to determine whether or not the minimum mandated amount of property damage coverage is sufficient is to head out car shopping. Take a look at some of the most popular models and what they cost, then compare the cost of an average new car to the amount of property damage coverage your state requires you to carry. If the amount of minimum mandatory coverage is significantly lower than the price of the average new car, adding additional coverage is probably worth your while.

In fact many drivers are quite surprised at how affordable it is to ramp up from the state mandated minimum coverage levels. It is often quite inexpensive to double or even triple the minimum required coverage levels, so drivers should at least price these options before simply accepting the minimum mandatory coverage in your state.

Useful Real Things on Getting Car Insurance Quotes

It is a known fact that with the purchase of insurance of whatever type it might be you are prone to invest a lot of time into finding the right one for your needs, and car insurance makes no exception from this rule. The thing that many people are looking for is not to get that deep into their pockets to pay the rates for this insurance. This is why the online car insurance quotes can come as a great help for you.

Finding more quotes you are enabled to compare better the prices and save more money with online deals found at reasonable costs. Around this aspect there are many facts that have earned the status of fiction with people simply hearing them and not digging further for the real information.

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  • A hearsay reveals the fact that with the first traffic violation, such as speeding, the quotes that a company provides you will be higher. Well, this is not real. Insurers will apply higher premiums only if you are seen as a high risk driver because you have violated the traffic laws for to many times.
  • The red color of a vehicle makes the insurer rate higher quotes. This is not true. Many people believe this, but the color has no influence on calculating the rates.
  • If somebody else drives the car with the owner’s permission, then he is also covered by the car insurance policy. This is true. The car insurance policy exists for the car and not the driver.
  • Cheap cars come with lower insurance quotes. This is not true. What matters the most is the car engine and its size, not to mention that with those cars that are considered sport cars, the rates will be set higher, no matter how cheap and old the car.
  • Living in an urban area will set the quotes higher than with those living in suburban areas. This is true. Insurance companies always see more risky driving in the city than driving a car in the rural areas. Cities have busier traffic and the proneness to car accidents is higher than with the suburban areas.
  • Your credit scoring is always important when needing to set the quotes for your car insurance policy. This is again true. Many companies consider a person with a poor credit score not responsible with his money, let alone when being behind the wheel.
  • Car insurance are free to charge you as much as they want to. This is not true. Nowadays with so much competition existing in this industry you will always find companies to offer discounts and lower quotes to gain more customers. This stands valid also for the companies which are new comers on the market.
  • If there is a car insurance providing lower coverage for lower quotes, then this one is good enough. This is not true. Once a driver is found at fault for an accident he won’t be able to file for a claim in getting back the money invested in the damage because the lower coverage he got is not offering this possibility for him. So all the expenses incurred will be carried out right from his pocket.