A Look at Car Insurance

With all the commercials running these days for car insurance companies, you would think that everybody’s either driving around uninsured or constantly getting into accidents. And if everybody is claiming to save you money on your insurance, what are the savings based on? It only adds to the confusion of purchasing insurance. Every car owner needs it, but deciding what to get can be overwhelming.

One debate people often have, especially owners of older cars, is whether to get liability only or full coverage insurance. Of course, there is a wide range of coverage in between the bare minimum and coverage for absolutely everything. The reason it’s questionable for most people is because there is a significant difference in cost between full coverage and liability only insurance. It’s not uncommon to see insurance companies selling full coverage plans that cost three to five times what liability only insurance would cover. Liability offers no special benefits, so people who choose liability only insurance do it for cost reasons only.

Those who choose full coverage insurance may have a multitude of reasons. While liability only coverage protects other people in the case of an accident, you will only receive personal benefits from your insurance company with full coverage insurance. If you are financing a new car, full coverage insurance is required. If you own the car outright, however, you may have other things to consider. How safe are you as a driver? How is your driving record? Have you been in any accidents? All of these will affect your rates. Another factor is the value of your car. If your car were totaled, what would you receive from the insurance company as payment? If your car is older, high in mileage, or low in resale value for some other reason, it may not be worth the extra insurance premiums you’d pay for full coverage.