For many people, buying a car is all fun and games until they face the ultimate dilemma: choosing the right insurance policy. Whether you’re looking for the best premiums or just want an affordable option to get you across the police check, there seems to be something for everyone.

For instance, California applies a 15/30/5 system, which is pretty good for the most part – provided you’re never involved in a serious accident requiring hefty medical and repair costs that your coverage can’t match up.

In this article, we’ll discuss why minimum coverage isn’t always a good idea and some tips on finding more favorable coverage.

Why Minimum Car Insurance Coverage Isn’t Always a Good Idea

Let’s face it; cars are expensive to buy and maintain. When you add insurance coverage into the mix, your brand-new automobile starts to feel like it’s drilling a hole in your pocket. At some point, you may be tempted to get the cheapest insurance coverage you can find. But is it really worth it? Here are a few reasons it may end up costing you more than you expected.

Uninsured Drivers

De acuerdo a un 2023 study by the Insurance Research Council, about 1 in 7 drivers on U.S. roads is uninsured. Now, imagine getting involved in a fender bender with that one driver. Since they’re not insured, you’ll probably have to go into a legal battle to get them to pay out of pocket. If, by some unfortunate circumstances, you don’t end up winning the case, you’ll have to pay for your vehicle’s repairs out of pocket since most minimum coverage options don’t cover uninsured drivers.

Comprehensive Coverage

Unless you live in a harsh weather-prone area, the chances are that you’d never expect your vehicle to be damaged by anything else other than an accident. Then again, there’s always the chance of getting caught in a hailstorm, hitting a deer, or even a tree falling on it.

In most cases, your minimum insurance coverage won’t cover these damages, forcing you to break the bank to get your car back on the road.

Collision Repairs

Nobody ever plans on getting into an accident. For the most part, most people try to drive safely and obey traffic rules. However, there’s always a chance you may make a mistake on the road, leading to an accident.

Minimum coverage insurance plans don’t protect you in the event of an at-fault accident. Again, this means that you’ll most likely have to cover all those costly repairs out of pocket. In retrospect, it is better to choose a slightly more expensive plan with adequate collision coverage.

Injuries

The U.S. has the most expensive healthcare system in the world. Even a simple visit to the ER with minor accident-related injuries like bruises or fractures could set you back hundreds or even thousands of dollars.

If you get into an accident where you are the at-fault driver, and the passengers in the other vehicle get seriously injured, your minimum insurance coverage plan may not cover the full amount. Take California’s 15/30/5 system, for instance. It only covers $15,000 in bodily injury per person with a $30,000 cap on total injury compensation for bodily injury per accident, regardless of the number of people injured.

Suppose the accident injured several people seriously, causing them to accrue huge hospital bills. In such a scenario, you’d have to cover the extra costs, which could rack up to the hundreds of thousands.

How to Choose the Right Car Insurance

At first glance, most car insurance policies look the same. It takes an eye for detail and a clear focus on what you want to choose the right coverage. With that in mind, here are some of the most important factors to consider when looking for the right insurance policy.

How Much Coverage Do You Need?

As you may have already concluded by now, the cheapest policy might not be the most suitable for you. Minimum coverage options don’t provide collision coverage nor comprehensive coverage to cover your car in the event of a collision or damage caused by natural disasters.

Unless you live in Hawaii, Michigan, or New Hampshire, your state probably requires you to have property and bodily harm liability coverage. Additionally, you need a plan that offers adequate coverage in the event of an accident so that you don’t have to pay for hospital bills and repairs out of pocket to cover the deficit.

What Is the Financial Health of the Insurance Provider?

Finding a good deal on an insurance policy is pretty easy. There are tons of options available, all of which are competing for your business. So, what happens if your insurance provider isn’t around to pay its claims? To err on the safe side, you should only buy insurance from reputable companies with a good financial background. You can get this information from independent rating companies like Moody’s, Standard & Poor’s, Fitch, and A.M. Best.

How Do They Compare Against Other Providers?

Insurance premiums for the same level of coverage vary greatly from one company to another. While all insurance prices are calculated based on risk, insurance companies have unique formulas for calculating the risk associated with insurance holders.

For instance, some insurance companies rely on insurance scores to determine how likely you are to file a claim, while others consider the type of car you drive and how expensive it would be to repair it should you file a claim.

One of the best ways to compare insurance prices is by shopping online. Most insurance companies provide free quotations, making it easier to determine the cost of insurance. You can also take the simpler approach of visiting reputable review websites that compare multiple insurance providers across several metrics.

Choose Your Auto Insurance Wisely

You can’t drive without insurance in most parts of the country. However, most states only require you to have minimum coverage. While it may come off as a more cost-effective option, it may end up costing you more in the long run. To err on the safe side, you should choose a plan that covers even the most unexpected scenarios. You should also deal with reputable providers who won’t abscond with your claim, leaving you hanging.