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Buying Bare-Bones Auto Insurance Is a Mistake

Rates are based on a number of issues, ranging from the minimum requirements of each state as well as the number of accidents in each region and the percentage of uninsured drivers. Generally, consumers can reduce their premium to the lowest possible by signing up for liability insurance at their state’s minimum limit, but that strategy can be risky.  Nowadays, you can easily compare online auto insurance quotes and find out how much you will pay for full coverage and for bare-bones policies. And you can adjust the numbers to fit to your financial possibilities and legal requirements.

# how-to-save-on-auto-insurance“Buying just the minimum amount of insurance required to drive legally typically doesn’t pay off,” said Michelle Megna, managing editor of CarInsurance.com. “Even a minor accident can cost much more than what your insurer will pay out to cover damages.”

In seven states at least one out of five drivers is uninsured, Megna said. They are Oklahoma (26 percent); Florida (24 percent); Mississippi (23 percent); New Mexico (22 percent); Michigan (21 percent); Tennessee (20 percent); and Alabama (20 percent).

It might be tempting to drop car insurance given the overall costs of owning a car, but experts say the first step is to shop around and consider ways to lower your insurance costs.

Minimum liability coverages are usually written like 30/60/25, which means an owner must be covered for up to $30,000 of medical expenses per person, up to $60,000 in medical expenses per accident and up to $25,000 for property damage.

Still, drivers should be aware that they’re taking on more risk if they opt to pare coverage. For instance, if a car lacking comprehensive coverage is damaged when a tree falls on it, the owner is on the hook for covering those repairs.

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