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Full Coverage or Limited Coverage?


Are you sure you are getting the right coverage for your auto insurance? Are you really getting the true value for your money? Do you think getting a full coverage auto insurance will be your best option? Think again, because what you are thinking maybe wrong.

Many car owners get the wrong impression that they should always have full auto insurance coverage. However, the truth is that it is not always smart to have full coverage. It is possible that you could be wasting a lot of money for coverage like that. Instead, why not consider a limited auto insurance coverage?

However, there are situations where you cannot avoid full auto insurance coverage. If you have a loan on your car, then banks will require you, as part of lending money, to get full coverage. In this kind of situation, it is obvious that you have no other choice. However, what if you paid a car in full?

If you have no loan on your vehicle, you now have an option not to get a full auto insurance coverage. You just need to evaluate the situation first. Try to calculate the value of your car at resale and the value of your monthly premium at full coverage insurance.

Now consider doing the math. Say, your monthly premium (full auto coverage) would cost $100 a month. In one year that would be $1200. Now consider this, if in two years you still have your policy and if in those years you have not filed any claims, then that would be $2400 all in all. That is a lot of money and if you consider what your car value is at resale– say it is just about $1500, would you think you just got the true value for your money?

Here is another situation. For example, you have a fully paid expensive car. Most car owners choose to get full auto insurance coverage for expensive cars. However, you seldom use it and if ever, you just drive it in short distances. Instead of paying for an expensive full auto insurance coverage, why not consider a limited coverage?

You see in this time of economic crisis, we should all learn to save money. Saving money includes saving on your insurance premium. You can always have the option to look for the cheapest insurance rates. Learn about discounts offered by auto insurance companies – discounts can save a lot of cash in the long run. Different car owners have different auto insurance coverage needs. You just have to determine what insurance coverage fits your situation best. Your insurance agent can always help you with this.