Why would you need $10 car insurance?

When you’re shopping for car insurance, you may wonder if you can get away with cut-rate prices. Sure, there are some companies that offer up something like 10 dollar car insurance. Even if that existed, it would not be what you might think. An insurance company has to balance their books like any other company. Even for the lowest risk drivers, the administrative costs alone run more than $10 for a policy period. There would be no way for a company charging that little to pay claims.

You might also want to read our article on what company produces the cheapest car to insure to find out how you can get ultra-cheap coverage that would actually be effective. While you may think about getting the cheapest car insurance possible, you should always put the coverage you need first. In other words, determine what coverage you need and then find the best rate for that coverage.

What amount of coverage should you get with auto insurance providers?

There’s no plan that makes perfect sense for every driver. Each state lays out minimum coverage amounts. When you buy the minimum coverage only, though, you are basically underinsured. Being in such a position leaves you open to costly lawsuits, wage garnishment, and increased insurance rates if you’re still able to find an insurer that will cover you in the future.

If you are sued and have any assets, including cash or property such as a house or car, then you are fair game for big lawsuits. Even if you think that you are judgment proof, having no assets and just a pile of debt, you’re still on the map with the people you injured, and their attorneys.

Even if the individuals do not hire their own lawyers, they may have insurance, and their provider could seek monetary damages from you. The cost of a lawsuit like this would be considerable and it could cause insurance companies to refuse to insure you in the future.

The minimum coverage in each state is designed to cover your liability in a small fender bender. Some states also require PIP (personal injury protection) as part of their minimum limits, which could cover an ambulance ride and some basic treatment at a hospital. In a more serious accident, you could be responsible for anything your auto insurance coverage doesn’t cover along with any damage to your car and your medical bills.

We understand that all of this is complicated. That’s why we’ll go into ultra-cheap car insurance step by step. Get a good start by typing your ZIP code into our helpful and free tool above to start your search for affordable car insurance.

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What are your needs for an auto insurance company?

A much more effective, efficient, and safer idea is to shop for the actual vehicle insurance that you need. What you do from there is find ways to cut costs, such as the following methods:

• Compare quotes
• Get multi-vehicle discounts (see What is a multi-car insurance policy? for more information)
• Secure multi-line discounts for purchasing multiple insurance policy types from the same insurance company
• Ask about good student discounts. (See Do school grades affect car insurance? for more information.)
• Drive less annually.
• Park in a secure garage.
• Install anti-lock brakes.
• Install anti-theft devices.

Start with the easiest way to secure savings — comparing quotes — and the rest will follow.

Let’s also compare available discounts, starting with a table showing the discounts State Farm offers.

As you can see, that’s quite a few discounts. Let’s see if Geico measures up.

Let’s take a look at one last table showing which companies offer an occupation-based discount.

No matter your profession, simply input your accurate information into our car insurance rates quoting system. In no time at all, you’ll receive information from multiple insurance carriers about how much it will cost to insure you.

From there, do a simple and quick evaluation of the carriers to determine which ones will be able to afford the cost of claims.

This is called creditworthiness, and once you’ve narrowed down the quotes to only those carriers who have received A+ ratings, you’re just about ready to make a decision. Read through the offerings to find out what coverage suits you, and then pick the lowest cost carrier from there.

How high should your deductible be?

The hardest part may be deciding how much coverage you want for your family and for your vehicles. High-risk drivers may find fewer options or more policies with higher premiums. Cheap car insurance is relative to what your driving record looks like and the coverage you want.

First, you need to know how thecar insurance claimsprocess works in order to decide what will suit you from a deductible standpoint.

If you file an insurance claim, you will have to pay a deductible out of the benefit proceeds. Some people are firm believers in saving money and setting it aside rather than keeping low policy deductibles.

For instance, if they were involved in a collision and had a $5,000 deductible, they would pay out that much money before getting repairs to their vehicle. If the total damage is close to that amount, drivers are also unlikely to file a claim as they’d get minimal payout compared to the automatic increase in their rates. For this and other reasons, your deductible should be a little lower than what you could afford to pay to fix your car. You’ll save on insurance quotes with a higher deductible, but you could have many more severe issues if you can’t afford to p[ay to fix your car when something happens.

The trouble comes when there is more than one claim within a year.

The deductible needs to be paid by the customer every time there is a claim. Sure, you can take the deductible out of the benefits when a claim is paid out, but it may interfere with getting your car fixed in a timely manner.

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The bottom line is that the claims process can be a bit of a hassle, but it’s certainly better than illegally driving uninsured and facing those repercussions as well as having to pay a hefty amount out of pocket if you’re in an accident.

Do you need comprehensive or collision coverage?

This is why many people who are either short on cash or just more attached to their savings opt for a lower deductible on their policies.

When it comes to collision and comprehensive coverage, there’s a debate with two distinct camps.

Some are for keeping collision and comprehensive coverage even after their car is paid off and has dropped tremendously in value, while others ditch these forms of coverage as soon as their car is fully paid for. The latter is often hunting for cheap car insurance, even if that means paying more in the event of an accident. Of course, people generally don’t think of it this way. They just think they’re saving money. For a high-risk driver seeing higher premiums for comprehensive and collision coverages, this may be tempting.

First off, collision covers you against incidents where you hit another vehicle or object. Comprehensive covers other incidents, such as extreme weather events and theft, with some limitations.

Some people drive around with all their worldly possessions in their car. When their vehicle is broken into and their items are taken, not everything is covered. Pay attention to the policy terms. You may be able to buy additional coverage for expensive electronics, such as sound systems, radios, and entertainment systems.

In addition, it’s worth noting that not all damages are going to total out your vehicle. But the costs could greatly inconvenience or put an added strain on your life, especially if you caused injuries to others or were injured yourself.

Think big picture and catastrophe kind of protection when you’re buying car insurance.

All kinds of disasters, big and small, can happen on the road. And as we’ve discussed, things can get expensive really fast.

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Setting Limits

Another challenging part of the insurance puzzle is the coverage limits. You have no idea whether you will be involved in an accident. All you know is that if it happens, and if it’s bad, you don’t want to be financially wrecked by the event.

First off, say the required insurance is listed like this for your state: $50,000/$100,000. That represents $50,000 in liability coverage per injured person with a cap of $100,000 paid out per accident. You would also see a property damage limit as well.

It could be $50,000 property damage per accident. Consider the costs of medical care for multiple people with severe injuries and the cost of cars today. Now, imagine that it is a multi-car accident, and you caused it.

You don’t want to get caught in a situation like this without enough coverage to pay for all of the damages.

Keep in mind that you would usually buy as much insurance as you have assets. However, be aware that if you’re a high-income earner, even with a high debt load, you can be sued for future earnings.

People can take action to put liens on your properties, vehicles, etc., and that means that you cannot sell your assets without paying off the people you harmed.

In addition, Bankrate recommends that you buy coverage to protect yourself from underinsured and uninsured drivers. Basically, you don’t want to buy too little insurance. In addition, protect yourself from other drivers who may not have bought any insurance or purchased too little.

If you’re ready to compare quotes using our FREE search tool below, simply enter your ZIP code to get started finding the cheapest car insurance in your area.

Frequently Asked Questions: Why would you need $10 car insurance?

Let’s take a look at a few commonly asked questions about this topic.

#1 – Who has the cheapest car insurance?

USAA, State Farm, and Geico generally have the cheapest rates out of the big car insurance companies.

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#2 – What is the best cheap insurance?

Geico and Progressive offer excellent cheap insurance.

#3 – What is the cheapest online car insurance?

The cheapest car insurance after an accident is State Farm with a starting rate of $869.

#4 – Is Good2Go insurance legit?

They have been accredited by the Better Business Bureau since 2015, which is a great sign.

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#5 – What are the worst insurance companies?

Depending on who you ask, Unum and AIG are not always seen as terrific insurance companies.

#6 – Is Geico really the cheapest?

It depends on where you live but Geico offers a ton of discounts to prospective customers.

#7 – Who has the cheapest car insurance for seniors?

Allstate offers great discounts to those who are older than 55 or working part-time, which puts them towards the top.

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#8 – When should I drop full coverage on my car?

Drop full coverage when the cost of the premium equals or exceeds the potential payout.

#9 – Who has the best car insurance?

Geico is seen as offering reasonable insurance that will protect you in a variety of situations.

#10 – How can I get non-owners insurance?

You will need your driver’s license number and a credit or debit card. Progressive, Geico, State Farm, Allstate, and Nationwide all offer non-owners car insurance.

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