You’ve saved up enough money, looking at different makes and models, and now you’re all set to buy a brand-new car. Surely, this is an exciting moment, especially when you consider that you’ve just made one of the biggest purchases you’ll ever make in your life. But as you should know, spending money doesn’t stop after purchasing your car. You should also think about buying car insurance. Many new car owners don’t have any problems shelling out a fortune for their car, and then they pick the minimum coverage to save a few bucks each month. Is this a wise move?
Of course, hundreds of different factors need to be considered. But the short answer to this question is no. Most of the time, a minimum coverage plan would only result in more expenses in the long run. The good news is that many providers like Insurance Panda offers different car insurance plans that balance protection and savings. When you feel tempted to pick this option, consider the following scenarios:
You might feel save while driving since you’re covered, but how about the other drivers on the road? Imagine your new car getting into a collision with another vehicle, and the driver isn’t insured. Some car insurance policies include coverage for uninsured motorists. But a minimum policy usually doesn’t have it. This means you’ll end up paying for repairs.
No matter how careful you are on the road, accidents can happen. And sometimes, it’s your fault. Not only do you have to think of repairing your own car, but also that of the other driver. Collision coverage is usually absent in a minimum coverage plan. Even if you’ve saved up quite a bit by choosing the cheapest plan, you might burn down all your savings due to the high cost of repairs for both your car and the other involved vehicle.
Many accidents involve things that drivers don’t see coming. The typical examples include a car thief, deer, or even hail. These things can damage your vehicle when you least expect them, but you don’t have to worry if you have comprehensive coverage. But this isn’t something you can enjoy by getting the cheapest option, so any unexpected emergencies that come up will be dealt with straight from your pockets.
Of course, accidents can involve a trip to the hospital. An accident in which you were at fault could result in another person getting severely injured, and that means paying for medical bills. Minimum coverage may pay a fraction of the cost, but you would have to shoulder the remaining amount. If your insurance doesn’t cover much of the medical expenses, then don’t be surprised if you need to shell out much more than you’re expecting.
At first, a minimum coverage plan may appear to have a high dollar amount. But don’t forget that repairs and medical bills can be costly. You can quickly deplete that amount after getting involved in only one accident. As a general rule, the lower you pay, the lower your protection. So rethink your finances and go for a plan that offers more coverage. It might cost more per month, but you can end up saving a lot more in the long run.