Car Insurance Savings Traps

The thought of saving money on car insurance leads a lot of drivers to get caught by saving more than they should. The idea is to balance what you need to have against what you can afford. Take a look at these four examples of cost savings traps, and you will get the idea of what to be wary of when purchasing auto insurance.

High Deductibles - Raising your deductible will lower your rates, but be careful. If your deductible is higher than you can realistically afford to pay out of pocket, you could forfeit the entire claim, costing you many times the amount you had hoped to save. The reason is a simple one: insurance companies do not have to pay out a claim until you have fulfilled your obligations by paying the deductible.

Dropping Uninsured Motorist - It may sound like you don't need uninsured motorist coverage, but dropping the coverage is a trap you have to avoid. If you are hit by a motorist without sufficient insurance, or driving without any insurance at all, you could find yourself depending on that coverage that you dropped in order to save a few dollars a month on insurance.

Collision Insurance - Collision insurance pays for damages to your own car. If you drop this protection and are found at fault in an accident, you will have to pay for your own repairs out of pocket. Ordinary liability insurance does not provide any assistance for your own car, and that could mean you are caught in a trap by trying to cut a few innocent corners.

Comprehensive Coverage - You may not think you are going to need comprehensive insurance, but what happens if your car is stolen, or a rock is thrown up by the car in front of you? Without comprehensive insurance, you will have to replace the car or glass out of pocket, and that could become very costly very quickly.