Why Getting Lowest Auto Insurance Coverage May Be Enough

The reasons vary by person and circumstances as to why getting the lowest coverage may be enough for your insurance needs. It is certainly something you should reflect on since the cost of having too much or not enough coverage can have a major impact on your wallet.

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For some people, getting a basic auto insurance policy is not even an option, because their lifestyle requires a high level of protection. This could be for a variety of reasons like those that have less experience driving or perhaps an expensive vehicle. Others may live in high-risk areas that have frequent car thefts or instances of vandalism.

You may fit into any of these categories and this makes you the least likely to opt for lower levels of auto insurance coverage. However, if you fit into a different consumer group, it could be a good time for you to review the specifics of your policy to see if you really need everything you selected.

You Do Not Own a Vehicle

You could be a frequent borrower of vehicles, including friends and family members. In other words, you do not own a vehicle. If this is your situation, it makes sense that you purchase an auto insurance policy with lower coverage.

It is your responsibility to make sure you can do your part and repay the owner of the car if you cause damage.

As soon as you slip behind the wheel and drive away, you have certain obligations. You should use sound judgment and exercise wise decision-making skills.

Of course, no one plans to have an accident, but if you do, you can be sure that the owner does not have to deal with the problem alone. Your level of coverage can work with theirs to ensure everything that requires attention has proper protection.

In addition, having a monthly or annual bill helps prepare you for the time when you purchase your own car. As you make your payments, you have a better understanding of what to expect. You can also familiarize yourself with the assorted limits and levels.

It is Better than Driving Uninsured

If you are like many Americans today, you might need to use your paycheck for other things, like groceries, rent, or mortgage payments.

So many people suffered from major downsizing over the past few years that they need every penny just to make ends meet. This means, you may not have the luxury of paying for extra automobile coverage.

If your main mode of transportation lies in your automobile, you need to make sure you have some protection so you can get around. You could live in a rural area where buses do not frequent and the nearest train station is miles away. This makes your car the only means for you to get to work.

Although the levels you choose may be low, it is better than breaking the law and driving uninsured. If a law enforcement officer stops you while you are driving without insurance, you will have much worse problems to handle.

Just remember to try to drive as safely as you can to avoid any unfortunate situations. As soon as your financial situation improves, you can always increase your limits or add extras to ensure you have the full protection you need.

Location Makes a Major Difference

You can probably reduce or eliminate specific levels of auto insurance coverage depending on your location. Everyone knows the car insurance industry stresses the importance of eliminating certain risk factors to receive low rates.

Some regions in the United States just have better prices than others do because they simply have lower crime statistics.

In reviewing the information on Census.gov, it is quite apparent that states like Maine and Vermont have extremely low car theft rates. There could be a multitude of explanations for these numbers, but the fact remains that during 2008, only 90 residents reported stolen cars in Maine. During that same year, those living in Vermont had seven more instances, reporting a total of 97.

By comparison, the state of Florida reported some type of property crime happened once during every minute or more accurately, in 42-second intervals in 2008. These property crimes included car theft. According to their records, one car was taken by force or other means in eight-minute intervals.

It is reasonable to deduce that people living in Vermont or Maine have a better chance at retaining their property simply because of these statistics. Therefore, lower levels of car insurance might not be a bad move because the odds favor them. Adversely, Floridians would do well to keep or even increase their coverage because of the risk involved.

Even if you live in a part of the country that does have higher crime rates, it is important for you to research the type of crimes that occur. Some states have more violent crimes than non-violent crimes. This could put you in a better position to decrease your car insurance coverage, especially comprehensive coverage.

You Carpool or Commute to Work

The Federal Highway Administration Highway Statistics Report for 2010 shows how the average American drives approximately 10,649 miles each year. You obtain the majority of these miles by driving back and forth to work.

If you only use your vehicle for pleasure driving, which is what most people claim on their car insurance applications, you could remove the higher liability limits and opt for the state minimum. Driving to work every day during rush hour traffic increases your chances of an accident by more than 50%. When you factor in human error, speeding and common distracters, you can understand why.

A recent study performed by Bikes Belong actually shows how most U.S. residents, about 50% regularly take trips under three miles. Even more incredible are the shorter distances of two miles or less. Approximately 40% of most are fewer than two miles. The one-mile trips account for 28% of these trips. Modern conveniences make it possible for many Americans to have the majority of the things they need right in their own neighborhood, so they really may not have to drive as much.

If you walk, bike or share a ride with others, you may have reason to reduce the amount of liability and collision insurance on your vehicle and still have enough to feel safe and protected.

Your Driving Record is Impeccable

Chances are, if your driving record is good and you have not filed any damage claims within the past few years, you could see some benefits from dropping or reducing your liability, collision, or comprehensive limits. You may even have the option of reducing personal injury protection, especially if your employer provides you with an ample healthcare plan.

Ironically, the car insurance companies want these kinds of customers. You may have many lucky breaks or more likely, drive safely and defensively to avoid accidents. However, most auto insurance providers use your great history to persuade you that you need extra protection.

Many customers keep their full coverage out of fear when they may never need so much coverage.

If you stop to think about your driving patterns, you may realize that your priorities are safety and avoidance, which lead to being a safe driver. Unlike others who take unnecessary risks, you treasure your driving privilege.

Do yourself a favor and take a few moments to review your current policy, especially the levels and limits. See if you have $100,000 or more in liability, collision, comprehensive or personal injury protection. Next, review your finances, health insurance, disability, and life insurance plans thoroughly.

If you believe that you can keep your assets intact without full coverage, make the changes according to your research. Many times, responsible drivers are also steadfast in other areas. You may already have protection from lost wages through your disability agreement or your life insurance can pay for the same coverage the car insurance policy pays.

You Rely on Additional Financial Resources

Some states such as California and Oregon allow you to forgo a basic liability policy if you can show proof of financial responsibility. This is usually reserved for people who have extensive resources and can afford the required amount. In addition, under normal circumstances, this option is only for residents in at-fault states.

In most cases, you will need a large sum of cash in the amount of $35,000. This remains in the possession of your state or regional Department of Motor Vehicles office.

If you have an accident or damage private property this retainer acts the same as a liability insurance policy. Although the minimum liability limits are 5/30/5 in California, they will accept this amount because it is cash and not credit.

If you do not have this amount of cash on hand, you have the option of securing a bond for the same amount from a surety bond company. They must have a business license in California, as you cannot go to another state to secure the bond. Business owners can apply for self-insurance, but the Department of Insurance must approve the status of the application before you register the vehicle.

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