2011 Ford Fusion 4-door Sedan SE FWD Angular Front Exterior ViewEnlarge Photo
Owning a car is a big expense, so you may be looking for ways to save a little cash. You may consider trimming your car insurance to the minimum required by state law.
Is this a smart move? Let’s take a look at the pros and cons of saving money on auto insurance.
Trimming your car insurance coverage translates into a lower premium, which in turn lowers your monthly bill. In the short run, this can certainly help you save a little money on car insurance, but make sure you trim your coverage wisely.Deciding which coverage options to keep
Most states require you to have at least liability coverage. Liability coverage protects you and other drivers in the event you cause an accident resulting in injury or damage to the other parties involved.In your search for cheap car insurance, there are several coverage options that you could trim without exposing yourself to too much risk. Drivers with older vehicles may cut collision or comprehensive coverage because the car just isn’t worth much. To see if this might be a viable option for you, do some math. If the annual cost of insurance is more than 10% of your car’s value, you could consider eliminating it.
Another option is to cut ancillary coverage options like roadside assistance, towing or rental car reimbursement if you’re confident a friend or relative could assist you if your vehicle broke down.Rather than cut coverages all together, you could also talk to your insurer about reducing limits to save money on auto insurance. For example, if you have liability coverage set at $100,000/$300,000, you could reduce that to $50,000/$100,000; you’ll pay less for less coverage. This, of course, increases your share of the burden if you do get into a serious accident, so think through your options before taking this step.
Facing increased risk
Of course, when you reduce your car insurance coverage, you’ll be responsible for more bills on your own in the event of an accident, theft or damage. If you’ve cut collision coverage, for example, and your car is severely damaged, you’ll be financially responsible for repairing all damage to the car including broken glass, crushed bumpers and dented doors. If you’ve cut comprehensive, you’ll have to pay for damage caused by natural disasters. These bills can quickly run into the thousands.Depending on your situation, it may be better to spend a little more each month to protect yourself from facing large repair bills. You can also shop around and compare car insurance rates to see if you can save money just by switching insurers. To confirm you are insured with a reputable company, learn what their customers are saying. You can read auto insurance reviews to give you an honest snapshot of an insurer before getting a quote.