If you are on a low budget and you want to get lower coverage to minimize your insurance premium, here are a few tips to self evaluate yourself.
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Unless you are absolutely broke and you only need to get insurance so that you are not driving it illegally, do not buy the minimal coverages. They are usually insufficient to cover for an accident.
However, if you are on a low budget and you want to get lower coverage to minimize your insurance premium, here are a few tips to self evaluate yourself:
- I have a very old car (less than $5,000) –The rule is that if your insurance premium is more than 10% of the value of your car, you should not pay for collision and comprehensive coverage. Collision is often about 50% of your premium.
- I do not own any property (house or other)
- I do not have almost no savings which I have to protect.
- My income is very low
- I live and drive in very low populated area
- I rarely drive your car
As you consider your options, you need to know that no coverage is too high. The insurance will pay only up to their limits of your policy. If you have 20/40/10 limits and you hit someone who files a lawsuit. The insurance will pay up to $20K for the injured bodily injury and $40K for bodily injury for the accident and then you will be responsible to cover the remaining costs from our own pocket.
The goal of insurance is to protect your property and assets in case of an accident and lawsuit by the injured party.