You may be tempted to buy the cheapest car insurance available when money is tight. However, personal finance expert Dave Ramsey says skimping on this essential coverage can ultimately destroy your budget if you’re in an accident.
Typically, the lowest-priced auto insurance provides state minimum coverage, which often only protects the other party in the accident. In that case, you’ll be on the hook for the total cost of repairs to your vehicle.
Plus, these so-called budget-friendly policies often come with low liability limits. So, if the other party sustained damage in excess of your limit, you may get sued for the remaining bill.
Ramsey advised purchasing enough insurance to cover any potential loss. At a minimum, you should carry $500,000 worth of liability coverage.
Ways To Save
Buying sufficient car insurance doesn’t have to break the bank. If you’re strategic, you can pay significantly less than the $1,483 annual national average.
- Take a defensive driving course
- Get good grades
- Install an anti-theft device
- Set up automatic payments
- Pay your premium in larger installments
- Drive carefully and responsibly
Remember: When you need to buy a new policy, shopping around is a smart idea. That way, you can rest assured that you’re getting the best rate possible.
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