Friday, April 12, 2024
Commercial Insurance

Inexpensive Car Insurance Vs. Liability Insurance

Inexpensive Car Insurance Vs. Liability Insurance
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Absolutely not! Inexpensive car insurance is not the same as liability insurance.

Many people confuse inexpensive auto coverage with liability-only auto insurance. Confusing the two may lead you to get limited insurance coverage and under-insure your vehicle.

You may also sacrifice getting quality car insurance coverage and quality insurance service in pursuit of the cheapest auto insurance deal in town.

In this article, we lay out the difference between inexpensive car insurance and liability insurance. Then, point you to the best way to get cheap car insurance rates for the type of auto policy you want to buy.

What Is Liability Insurance?

Auto liability coverage covers bodily injury and property damage that a driver or car owner causes to third parties. So, when you’re at fault for an accident, your insurer covers the cost of treating the injuries sustained by other people and the cost of repairing their vehicle or property.

It is usually the most basic car insurance that’s required in almost every state and covers the following costs to third parties:

 

  • Medical bills
  • Property damages
  • Legal costs
  • Pain, suffering, and lost wages

The downside is, liability insurance doesn’t cover the driver or the car owner. It won’t cover your medical bills or the cost of repairing your car when you get involved in an accident.

Due to its limited financial protection, liability insurance is usually the most affordable way to buy car insurance.

Each state sets its own minimum insurance requirement for liability coverage. Premium rates vary by state, but they can be as low as $23 per month depending on your location and the insurer. 

Of course, buying state minimum liability coverage is better than none and may save you money on premiums. But, its low limits mean that you’ll be out of pocket for a large amount in case of an accident.

A better option is to focus on getting as much full auto insurance coverage as you can. For instance, full coverage policies like comprehensive or collision have higher limits.

What Does Inexpensive Car Insurance Mean?

Getting inexpensive auto coverage means shopping for an affordable auto policy rate that’s good for your budget and needs. And, when shopping for cheap auto policy,  you should carefully read the policy terms to determine what’s included. 

Let’s say you get liability insurance quotes from 3 top insurance companies as follows:

  • State Farm: $34/month or $409/yr
  • Nationwide: $38/month or $462/yr
  • Progressive: $43/mo or$514/yr

Looking at the policy premium rate, one can say that State Farm offers the cheapest liability insurance coverage. But, you have to compare the policies to see the perks offered by each company, like:

  • Coverage limits and options
  • The deductible amount
  • Customer service
  • Extras like roadside service

You see! Getting cheap or inexpensive auto coverage goes beyond the price. You need to make sure that you’re comparing apples for apples to lock in a quality, low-cost auto insurance rate. Otherwise, you may end up sacrificing quality for cheap.

How To Get Inexpensive Car Insurance

There are several things you can do to get cheap car insurance rates. For example, keeping a clean deriving record, installing safety and anti-theft devices, and taking advantage of auto coverage discounts.

However, the best way to find inexpensive car insurance is to compare rates and policy limits & options from the best insurance companies. Though that can be a time-consuming hassle, you can get help from a qualified insurance agent.

An independent agent will help you determine the type of car insurance that’s best for your needs. They also rate-shop on your behalf from their network of insurers to get you the most comprehensive insurance possible at an affordable rate.

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