We often assume that more insurance is always better, but in some cases the opposite is true. How much are you paying for cheap car insurance, and is the coverage really as valuable as you think? Read on to find out more.

Isn’t Insurance Always a Good Idea?

In America we are offered so many different types of insurance that it can be hard to keep track. Car insurance, travel insurance, life insurance, home insurance, rental insurance – the list might go on forever if we let it! But the truth is, not all of these policies are necessary. Some aren’t even useful! This article attempts to provide you with information that can help you buy the car insurance you actually need, instead of the car insurance companies want you to pay for.

Comprehensive Insurance

Comprehensive car insurance covers your car in case of natural disasters, theft, or vandalism. If you are a wealthy person with a $75,000 vehicle, this type of coverage may buy you some peace of mind, but otherwise it’s simply a drain on your pocketbook. Bodily injury insurance is equally unnecessary, as it covers the cost of funeral and mortuary fees should you be killed in some type of collision. Unless you have no savings or are truly concerned about the possibility of death, this coverage is unlikely to be helpful.

Collision Insurance

Collision insurance will, again, only be useful if you are a wealthy person who owns an expensive automobile. Because collision insurance pays for damages done to your car during an accident, an older car with depreciated value may not be worth the premium you’re paying on it! If your car is worth less than $2000, as many older vehicles are, you would be better off putting the money you’d pay for collision insurance into a bank account where it can collect interest and help you buy a new car in the event of an accident!

Rental Car Insurance

Many companies offer rental car insurance to cover any damages incurred while driving a rental car. However, most people rent cars relatively infrequently, and as a result any monthly payment towards rental car insurance is going to cost you more money than it saves. Put the money towards a type of insurance which may actually be useful, such as liability insurance. In most cases personal liability insurance will cover occasional rentals, so there’s no need to fork over extra cash.

Useful Car Insurance Coverage

Ultimately the insurance you really want is property damage and bodily injury liability insurance. These types of coverage will pay for hospital bills and court fees should the other driver choose to sue you, or be injured during a collision. Unlike the coverage listed in the previous sections, this type of auto insurance is absolutely necessary for any driver, and in almost all cases is required by law.

Before buying auto insurance coverage, know what you are getting yourself into, and make sure that the coverage you have is the coverage you need!

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