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Why Cheaper Isn’t Always Better When Buying Car Insurance In California

Everybody likes to save money, but purchasing the cheapest car insurance available in California comes with inherent risks. If you cause an accident and your policy limits aren’t enough to cover the damages, you might have to foot the bill out of your own pocket, which could lead to overwhelming debt and possible bankruptcy.

Here are a few reasons why you should consider buying auto insurance in California that exceeds the minimum required limits:

1. The Minimum Liability Limits May Not Cover All Of The Damages

According to the California Department of Insurance (CDI), all drivers must be able to show proof of financial responsibility for any vehicle they drive. Most people do this by carrying auto insurance policies.

In the state of California, drivers are required to carry liability insurance that meets certain minimum limits. Those limits are $15,000 for the death or injury of one person in an accident, $30,000 for all injuries and deaths caused in one accidents, and $5,000 for property damage. As you may already know, these limits often are not enough to cover all of the damages caused in a major collision.


Why Cheaper Isn’t Always Better When Buying Car Insurance In California

The minimum liability coverage often is not enough to pay for all of the damages caused in a major collision.

2. Premiums Are Not The Only Cost

When you’re looking at how much your insurance will cost, the premiums are not the only expense to consider. Although cheaper premiums might reduce your monthly expenses, you will likely have a high deductible to pay if you are ever forced to file a claim.

A deductible is the amount you have to pay before insurance will pay out. For example, if you have a $1,000 deductible, you will be required to pay the full $1,000 before your insurance will cover the remaining damages up to your policy limits. Ultimately, you might end up paying more in the long run if you carry the cheapest insurance and wind up having to pay a high deductible.

3. Optional Coverage Can Save You From A Big Bill

Although the minimum liability coverage is mandatory in California, there is add-on coverage available that could protect your financial security. It is important to remember that liability insurance only covers the expenses of other people in a collision that you cause; it will not cover your own medical bills or property damage.

Here are a few types of add-on coverage available in California:

  • Uninsured/Underinsured Motorist Coverage: This type of insurance covers you if someone who is uninsured or does not carry enough insurance hits you.
  • Medical Payments Coverage: This coverage helps pay for medical expenses if you or passengers in your vehicle are injured.  MedPay will go into effect no matter who is at fault in the crash.
  • Collision Insurance: This covers vehicle repairs after a collision, even if you hit an inanimate object.
  • Comprehensive Coverage: This covers damage due to bad weather, theft, fire, vandalism, or other types of non-accident related events.
  • Additional Insurance Coverage: California drivers also have the option to purchase coverage for amenities such as stereos or custom wheels. You can also buy insurance for towing, road service, or a rental car while your vehicle is being repaired.

Although cheap auto insurance in California might have an attractive price tag, it’s important that you have a full understanding of your financial liability before you commit to a policy. It’s a good idea to invest in extra liability coverage, a low deductible, and optional add-on coverage if you can afford them.

Did we miss any important points? Feel free to leave a comment below.