Well it has come to that time when either you are going to buy your first car or you are shortly due to renew the insurance policy you have in place on your existing car.
Naturally, if you are buying your first car or replacing one, you will shop around. When you see a possible “good buy”, you will lift the hood and survey the internal workings. You will look carefully at the bodywork and test drive it. Only when you are satisfied the vehicle is mechanically sound and good value for the asking price will you confirm the purchase. You do this because you know you are making what you hope will be a medium to long-term investment. It would be disastrous if you paid out hard-earned cash only to find the vehicle breaks down regularly and almost immediately starts to show signs of rust. This should warn you that time should equally be taken in finding the right insurance policy to protect the new member of your family. You know you got a great price on the machine, but accepting cheap auto insurance may give you a policy that breaks down the first time you try to make a claim.
There’s a sad old cliche that says you get what you pay for. In this case, opting to buy the cheapest policy usually means you are buying a poor value service. The only way to be sure you have found good value is to read the policy before you buy. Yes this is often a tough task. Insurers get their attorneys to write everything in obscure English and it can give you a headache within five minutes of starting to read. But that should not put you off. Just as you would test drive the car before buying you should see exactly what you are being offered as protection.
Take the mandatory minimum as an example. Suppose you live in Michigan and the minimum is 20/40/10. If you injure someone in an accident, how far is $20,000 going to go towards paying for treatment? Remember, if the treatment costs more than $20,000, the innocent victim of your driving is entitled to sue you to recover all the other costs. If you own a house and have savings, all your assets could be lost just because you economized. Now think how far $10,000 might go to repair a BMW, Lexus or other high-end or luxury vehicle. It’s the same with the deductible. Can you really afford to pay more than $500 out of your own pocket for every claim that comes along? Suppose two come in the same year? What you should be looking for is affordable coverage. Cheap auto insurance is usually bad value. Get multiple auto insurance quotes for a range of cover and see what represents the right level of cover at a price you can afford.