Cheap car insurance FAQ

what is the cheapest auto insurance

Cheap car insurance FAQ

What is the cheapest insurance you can buy?

The answer starts with the type of insurance. If you buy the mandatory liability cover, maximize the discounts, accept the highest level of deductible, and find the lowest annual premium rate, this will be the cheap car insurance you want. But if you need more than the basic legal minimum, it will cost more. The more coverage you buy and the bigger the amount insured, the more expensive the policy to buy.

What is the law on the mandate?

All but one state requires you to have a minimum amount of cover. These are the so-called social responsibility laws. They say if you choose to drive, you must always have a minimum amount of money available to pay for repairs and cover medical expenses if there's an accident. But the detail of the mandate varies from state to state. You will find your own law explained on the website run by your state's Insurance Commissioner.

How much cover do you need to buy?

This is for you to decide. If you own an old vehicle outright and it has little value, and you have no assets to protect, the mandatory minimum cheap car insurance will probably be sufficient. But if you have an auto loan, the lender will require you to buy collision and comprehensive cover protecting the real value of your vehicle. If you have assets to protect, e.g. you own your own home and have a portfolio of stocks and shares, you could be sued by injured parties. This could justify you buying more liability cover to ensure you always have enough money available to pay claims without being forced to sell your home or other assets to pay the damages.

Can you make your cover cheaper over time?

If you want cheap car insurance, build up a strong safety record as a driver and the rates will fall. You may also fit additional features to your vehicle to earn discounts. The value of your vehicle will fall year on year, so the premium rates for collision and comprehensive will also fall. Finally, once you have paid off any auto loan, you can drop collision and comprehensive cover and drive on the cheaper liability cover.

How can you change your cover?

This depends on the terms of your policy, but the general rule is you can contact the insurance company any time to ask for changes. Indeed, the law requires you to tell the insurer if there are any changes in your circumstances. Obviously this covers changing the make and model and moving to a new address, but it also includes less obvious facts like a review of your credit score found errors and the score has improved. For the record, moving to an address in an area where there's less auto crime, buying a safer make and model, and improving your credit score all reduce your premium rate and give you relatively cheap car insurance.

what is the cheapest auto insurance