How Much Should You Really Pay for Car Insurance?

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We’re all about helping people save money on car insurance. We help you compare auto insurance quotes, pick the lowest rate, and you save. That’s how it works. Right? Well, sometimes, when you pay for car insurance, it's actually helpful to pay more.

That's right ... you may want more liability protection, better claims service, or broader coverage generally.

When you pay for car insurance, here are few things you might want to shell out a few more dollars for.

To Get More Coverage

Maybe you've had the same level of liability insurance for 10 years: $25,000/$50,000 per person/accident in bodily injury coverage and $25,000 in property damage liability. But ten-years-ago-me you were a student just out of college without many assets.  You didn't think you needed much more.

But over the past ten years, you've accumulated 10 years of claim-free driving and moved to a safer neighborhood, started a family, and started saving for retirement.

If get a quote on you might find out that you could more than double the amount of bodily injury coverage — to $100,000/$300,000 — for less than $10 more per month.

The additional peace of mind is well worth the few dollars extra each month for car insurance.

Each person's circumstances are a bit different, but if your current insurance is at state minimum level, you should think about raising the limits to protect yourself.

To Lower Your Deductible

This can sometimes be an easy one. Imagine happily driving along the highway and… crack. A rock hits your windshield and it was too big to repair. You'll need a whole new windshield. Now not so happy. Even less happy when you realize that you set your deductible to $1,000 thinking it would save me some money AND you didn't buy glass coverage. Ouch!

Now you'll end up paying for the entire windshield, or most of it, out of pocket. Big sad face.

Most financial gurus will tell you to choose a higher deductible in order to save money on your car insurance premiums. But that’s not always a good deal. If you save $50 per year on premiums by raising your deductible from $250 to $750, you’ll have to stay accident-free for 10 years to come out ahead. It may be smarter for you to pay a little more in car insurance premiums in exchange for less out of pocket costs if you need to claim.

You’re All About The Designer Brands

You can probably list off a few car insurance companies right now. And there’s a reason for that. Insurance companies spend millions every year making sure you know their name and how do you think they finance that? That’s right: your premiums.

The benefits of going with a larger, better-known insurer is that you can take advantage of their more expensive resources. Longer customer service hours, brick and mortar offices, local agents, mobile claims units – all of these come at a price. Although, just because you’ve heard of the brand name doesn’t guarantee you those things. Smaller insurers often team up with larger companies to pool resources. Check out our companies guides to see what benefits different insurers can offer you.

Think you’re getting a loyalty discount by sticking with your insurer for five years or more? Nope — the company’s probably charging you extra, because they know you’re less likely to leave.

Your Current Insurer is Garbage

On the other side of the spectrum, you may feel stuck with a company that's done you wrong. You were happy with ‘super-cheap car insurance Inc’ — until you got into a fender-bender. It should have been an easy claim, these things happen all the time, right?

Not for your insurer.

They kept you on hold for hours, tried to charge you extra and generally turned a simple claim into a nightmare.

It’s time to compare auto insurance and upgrade to a better company, even if that means paying a little more. Look at some reviews and ask your friends and family for recommendations. Think about what you want in an insurer: local branches, 24/7 claims service, good sense of humor.

Your Life is Expensive

A fancy sports car, a house in the suburbs, kids… these things all have one thing in common: they’re expensive. If you’ve wondered, “how much car insurance do I need?”, your net worth is the answer.

When you were a college student with about $5,000 worth of possessions, you didn’t worry too much about getting into a car accident and being sued for everything you owned. Now, however, you may own a house and have some money set aside — and that means you should protect your assets.

Whatever reasoning only you can really determine home much you should pay for car insurance.

You shouldn't pay a lot more, more than you need to, or more for the same coverage. But most of these recommendations may only be an extra few dollars a month and if you do your research, you may even pay less than your current premium. 


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