Cheap Auto Insurance: Guidelines and Definitions When you hear the word “cheap”, you probably tend to automatically think in terms of something that costs less. You are probably also aware that cheap is not necessarily always better.
Cheap auto insurance is everyone’s dream, and some companies may even use the word “cheap” in association with their rates. That is fine, as long as the word “cheap” means affordable auto insurance or discount auto insurance.
Because most states now require that a licensed driver carry automobile insurance, many auto insurers have come up with “minimum coverage” policies. You may also hear these types of policies referred to as “legal limit” policies. As both names imply, these policies provide only enough auto insurance coverage to ensure that a person is in compliance with a state’s mandatory auto insurance law.
This type of insurance is indeed cheap auto insurance. The rates are for sure going to be lower than other policies; however, the coverage provided by such a plan may be severely limited.
For some people, however, the coverage provided in cheap automobile insurance may very well be all that can be afforded. If this is indeed the case, then it is still advisable to “comparison-shop” for this type of insurance.
The first thing to determine is if a particular insurance company carries “legal limit” / “minimum coverage” insurance. Some companies may not provide this type of affordable auto insurance as it is defined. Instead, they may have an insurance plan with very low rates, but the coverage is still more than that provided in “minimum coverage” insurance.
Other companies, however, are in business strictly for the purpose of providing “minimum coverage” insurance, and that is the only coverage plan they offer. These companies do serve a purpose, as they do make it possible for a driver to conform to the law when it comes to having automobile insurance coverage.
However, a specific company may not be licensed to operate in all states, and it may be necessary for the driver to actually live in the state(s) that make this type of insurance available.
Cheap auto insurance may not actually save you money in the long run. If the dollar amount of property damage or personal injury exceeds the amount allowed by the coverage, the insured person is responsible for any differences. This can become very expensive, very quick, and totally cancel out any savings that may have been seen from purchasing cheap automobile insurance.
This can be especially true in the case of medical expenses. If a person with minimum coverage is hurt, or causes someone else to be hurt as a result of an automobile accident, the immediate medical expenses can quickly mount up. If the trauma of the accident causes a physical condition to develop later, or aggravates an already-existing health problem, then those medical expenses must be met.
Further, cheap auto insurance does not always pay for repairs to the insured’s personal vehicle. It only allows for repairs to any other cars that were damaged as a result of the accident.
And, even if it does pay for repairs, that may very well be the extent of the coverage. A car may be considered repaired if the damage caused by the accident has been corrected to enough of an extent to where the car is operable again. “Cosmetic” damage may not even be addressed.
For example, say you are involved in an accident, and the panel over the rear wheel was bent in such a way as to cause it to rub against the rear tire. The car, however, is made of a type of material in which the panel can merely be returned to its original position and steps taken to ensure that it is clear of the tire, and will remain intact. In other words, replacement of the entire panel is not considered necessary, and, indeed is not covered under your insurance plan. Neither is re-painting, sanding, buffing, or otherwise restoring the paint or finish to its original condition.
Cheap automobile insurance will provide the coverage that one needs so that he or she can attest to having car insurance. If that is all one can afford to be “legal”, then that is the type insurance that should be obtained.
