Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Aug 18, 2021

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Key takeaways...

  • A minor car accident can cause thousands of dollars in damage
  • While most states require bodily injury liability very few require any kind of comprehensive coverage
  • If you have an older car, then maybe collision coverage is not right for you

Low-cost auto insurance is a common term among drivers, and it’s much more reasonable to search for a low-cost auto insurance policy than cheap car insurance coverage.

While its certainly understandable anyone in today’s economy desires to get the cheapest car insurance and lowest rate possible auto insurance is a very big blanket of financial protection when operating a vehicle and drivers need to compare quotes equally.

A minor car accident can cause thousands of dollars in damage while a major auto accident can literally cost millions and years of litigation along with potential personal liability. While the word we use for it may seem inconsequential, “cheap” could mean you’re willing to give up essential auto coverage to get a lower price. Low cost can be used to describe a policy that has the same coverage at a lower cost compared to other similar policies. This is true even for drivers with a clean driving record, a good credit score, and a car with the latest safety features.

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What’s The Cheapest Car Insurance That Still Meets Your Coverage Needs?

When you compare car insurance policies by premiums, then you are most likely not paying enough attention to the details of coverage. Instead, we recommend looking at coverage, eliminating any companies with problematic customer reviews, and then choosing a policy.

When you search online, you can set specific coverage limits and deductibles. Make sure to decide what you’re comfortable with up front. This way, you can avoid nasty surprises later on. If you’re not careful, an insurance company could raise your deductible and give you a deceptively low rate. When you know what to look out for, you can make sure you’re actually comparing like products.

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What Type of Auto Coverage Do You Need?

While most states require bodily injury liability, very few require any kind of comprehensive car insurance. Collision and comprehensive coverage is the type that covers your auto damage in the event of an accident. If you don’t have personal injury protection, you could also find yourself with a lot of extra medical bills to pay.

Having just minimum state requirements usually only protects other people if injured or have property damages while you are responsible for your own (in states who operate under tort law). In accidents that are covered by the liability limits you’ve paid for, it also protects you from being sued.

Learn about the types of car insurance and determine what you need. If you have a new car you may want to consider getting GAP insurance.

If you have an older car, then maybe collision coverage is not right for you, but you may still want personal injury protection. Either way, you need to understand what types of coverage available and then check off what you need before requesting quotes.

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How much coverage do you need?

States often require drivers to obtain very little car insurance and many limits are simply based on the average price of a car to ensure drives have enough coverage to pay for the replacement of the damaged vehicle.

However, we live in a society where medical costs can run $10,000 or more for a single night in the hospital, and having $15,000 or $25,000 coverage as required by state law is certainly not very much in the case of the average price of a minor car accident. While liability coverage protects you from being sued after an accident, it only works when you have enough to cover the other party’s losses. If your liability coverage is insufficient, they could sue you for the remainder. Even if you’re not at fault, if you’re hit by an uninsured motorist without collision insurance, you could find yourself paying for your own repairs. Lawsuits can take years, especially when you account for the time people spend trying to collect.

Car leasing companies almost always require at least $100,000 in coverage before allowing you to take possession of the vehicle.

When you choose collision and comprehensive coverage, insurance companies look at things like if you have a clean driving record to set your rates. Your coverage limits are generally set based on the replacement cost of your vehicle. Unlike the value of other cars that could rely on your property damage liability, your car insurance company can determine exactly how much your car is worth to also set insurance premiums.

Compare Quotes Equally

Once you understand what type and how much coverage you need, its time to start a comparison search to find the lowest cost of insurance you can find that meets all of your needs.

When the quotes come in, sit down and make sure the types of coverage levels, limits of coverage, and deductibles are all as you requested.

Furthermore, you can verify that all of the low-cost auto insurance quotes you requested offer the same coverage levels then you are ready to compare premiums.

Of course, you also want to read up on the numerous discounts and make note of any you might be eligible for are applied.

Most of the larger car insurance companies all offer pretty equal service and features so its fair to start deciding on what car insurance company to use at the point.

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References:

  1. https://www.libertymutual.com/auto/car-insurance-coverage/bodily-injury-liability
  2. https://www.nationalgeneral.com/learning-center/insurance-basics/how_much_coverage.asp
  3. https://www.safeauto.com/