What’s really part of that cheap car insurance?

Cheap car insurance may be good, but only in the short term.

We have all seen those commercials, the ones that promise that you will only pay $39 a month for your car insurance. Sounds great doesn’t it?

A little too great.

That $39 cheap car insurance is just so you can drive and not get in trouble with your state’s DMV. Unfortunately, it doesn’t really offer any protection for you if you were to cause an accident or get into an accident with another that doesn’t have car insurance.

What Cheap Car Insurance Covers

This cheap car insurance, in most cases, is basic liability coverage. Basic liability coverage consists of:

• Property damage liability coverage: coverage that will pay for any damages you cause with your vehicle to another person’s vehicle or property.
• Bodily injury liability coverage: coverage that will pay for medical expenses that you cause with your vehicle to another person or their passengers.

Not only will this cheap car insurance only cover the bare minimum of the coverages that you are required to have, but it will also only cover at the absolute lowest amount of coverage you are required to have.

What Cheap Car Insurance Does Not Cover

The cheap car insurance that you see advertised on TV does not cover the following:

• Damages to your vehicle
• Medical expenses from injuries to you or your passengers
• A rental car
• Towing
• Coverage to your vehicle if you are hit by someone without insurance (uninsured motorist property damage)
• Medical expenses from injuries to you or your passengers if you are hit by someone without insurance (uninsured motorist bodily injury)

Why Cheap Car Insurance is Not a Good Thing

In addition to all of the stuff that it doesn’t pay for above, this cheap car insurance that you will be paying for to protect you actually offers hardly any protection at all. For example, say you purchase your cheap car insurance and you live in a state where the bare minimum is $10,000 is coverage for bodily injury liability coverage per person, $15,000 bodily injury coverage per accident and $10,000 is coverage for property damage liability coverage.

This may look like a lot of coverage, but it is really not. If you cause a car accident that has injuries involved then the most your policy is going to pay the other person to cover their medical expenses is $10,000. We all know how fast medical bills add up and this is going to barely be enough to cover most car accident injuries, let alone major car accident injuries.

Which means that you will have to pay for any medical expenses beyond your $10,000 coverage out of your own pocket.

As for hitting another person’s car, you would also only have $10,000 there too.  So if the vehicle you hit was determined to be a total loss, how many vehicles do you know of out there that only cost $10,000? If it was determined that you owed the other person $20,000 to replace their vehicle, than your insurance would pay $10,000 of it and you would have to pay the other $10,000 out of your own pocket.

In the end, paying a little bit more a month for better car insurance coverage ends up being a lot less costly than having to pay for a car accident out of your own pocket.