How to Choose the Cheapest Car Insurance Coverage

Choosing the cheapest car insurance coverage is not just as simple as finding the right car insurance company. There are up to a dozen different kinds of insurance coverage you can choose from, and for each one, there are more choices in terms of your deductible and coverage options. If you want to save a lot of money on your car insurance, follow these steps.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• Computer
• Pen and paper
• Phone
• Internet connection

Find out what insurance your state and lien holder requires

1. Decide which coverages you must have legally in your state, so you know what types of coverages you need to have. Some states require uninsured motorist coverage in options that include "stacked" and "non-stacked." Others do not require this but do require either comprehensive, collision or at least basic coverage.

2. Write these coverages down, including the deductible amounts your state requires. Usually, they only require at least a $1000 deductible,

3. Find out which coverages your lien holder requires. Most will require tht your vehicle be insured with protection against collision, theft and some require basic coverage. Write these down next to the legal state requirements. This comprises the complete list of coverage types that you have to have in your policy.

Choosing the cheapest coverage options

4. Log on to your insurance company's Web site or talk to your agent over the phone about the deductibles and coverage options on each type of mandatory coverage. The major ones will be comprehensive, collision and basic coverage. Uninsured motorist protection will cost more.

5. Customize your package by coverage type, asking for quotes with certain combinations of coverages and deductibles, from your agent or on the Web.

6. Lower your basic coverage (to protect against medical payments and injuries to other drivers) to the lowest amount of coverage you are comfortable with (usually $10,000 per person/ $20,000 per accident). This is how much your insurance company pays per injured person, and its total payment. Sometimes this includes medical payments, which will cost more.

7. Choose a lower property damage coverage. This protection insures you against damage you cause to a building or other public property. Lower the coverage to $10,000 if allowed in your state, and only if you are comfortable with this coverage.

8. Choose higher deductibles for collision and comprehensive and note how much this saves you. If a deductible of $1000 saves you more than $20 a month over a deductible of $500, it is probably worth taking a higher deductible, because over two years you are going to spend the difference in deductible ($500) just on your coverage policy. After three years accident free, you are in the black.

9. Consider whether you really need additional coverage such as uninsured motorist property damage and uninsured motorist bodily damage. It is always a wise choice to have these, in case you are hit by an uninsured motorist, but play it smart. You can save a lot of money each month choosing your coverages wisely.

Tips & Warnings

• Knowing which coverages you need by law is a good place to be Then decide which coverages you want, play with your deductibles and see which gives you the lowest rates.
• Saving money on your monthly bill is always great, but don't cheat yourself out of potentially needed coverages. While it makes sense to lower your deductible, don't leave yourself without important protection against theft, if you live in a high crime area, and don't pass on flood coverage if you live in a flood prone area.

Resources

• A list of minimum car insurance coverages by state and age
• Car insurance coverage definitions