Let’s face it, auto insurance is a dull subject that most people avoid talking about. It’s far easier to choose the first quote you receive and not worry about it. This method is fine if you don’t mind wasting money. If you do some research beforehand, you can save a few hundred dollars and get peace of mind. Here, we’ll look at some of the lesser known auto insurance options available.

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Find State Insurance Programs

Some states offer low cost auto insurance programs to their citizens. You won’t receive full coverage, but these programs provide enough to meet the minimum state standards for liability coverage and property damage. There are also optional medical payments and uninsured motorist bodily injury coverage. California residents, for example, can expect to pay under $400 for this kind of policy. Applicants must be at least 19, have a vehicle valued under $20,000 and be considered low-income, meaning their annual compensation ranges from $25,000 for a single person up to $69,000 for a family of six. Contact your state’s insurance department to see if they offer something similar.

User Smaller Insurers

Some of the lowest rates available can be found with lesser-known and smaller insurance companies. In order to compete with the big companies, small companies have to keep their rates low to survive. Smaller insurance companies will not offer many of the frills and extra benefits that some of the big companies offer; however, they won’t charge you for these extras either. For instance, many of the smaller ones will not offer some of the selling point items like roadside assistance or rental car reimbursement. If you need a basic no-frills car insurance policy, then you should really look at some of the lesser-known car insurance companies and their policies.

Find Out How Much Coverage You Need

Before you begin comparing premiums, estimate how much protection you actually need. A standard package includes six basic coverages: bodily-injury liability, property-damage liability, collision, comprehensive, uninsured- motorist coverage and medical (or, if you live in a state with no-fault insurance laws, personal-injury protection). Your aim is to eliminate the coverage you don’t need and to take no more than necessary of the rest.

Do not skimp on the two liability coverages: bodily injury, which pays medical bills for anyone you may injure, and property damage, which covers any car or other property that you might damage in an accident. Most states require you to buy a minimum amount of each. Bodily- injury minimums range from $20,000 to $50,000 for each victim, up to $40,000 to $100,000 an accident; property damage ranges between $5,000 and $25,000.

Another important part of any basic package is uninsured-motorist coverage ($20,000 to $40,000 is required in many states). If you have an accident involving an uninsured driver, this coverage pays for injuries to your passengers, your own ”pain and suffering, ” and other expenses that health plans do not pick up.

What You Can Cut

Collision and comprehensive coverages make up more than 40% of your total premium. Collision pays for accident damage to your car, while comprehensive covers most other risks to the car, ranging from theft to natural disasters. Unlike the coverages discussed so far, both are subject to deductibles of anywhere from $50 to $1,000. (The deductible is the amount you pay out of your own pocket before the insurance kicks in.) Choosing high deductibles can lower your premiums considerably. Drop collision coverage if the most you can expect to receive as a settlement would equal just a few years’ premiums.

There is also room to save on medical coverage, an optional feature usually offered outside no-fault states. This pays physicians’ fees, hospital bills and sometimes funeral expenses for the driver or passengers. Your life and health insurance render this coverage unnecessary. If you live in one of the 15 states with no-fault insurance, which requires your insurer to pick up your damages even if someone else caused the accident, you may have to buy personal-injury protection, or PIP, to cover your medical bills.

By Sara Lennon on behalf of Merlin Insurance.

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