Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate drivers about...

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Reviewed by Laura Walker
Licensed Agent for 10 Years

UPDATED: Jul 8, 2021

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Whether or not you should use a cheap auto insurance company depends on your personal needs, wants, and budget. There are multiple trustworthy insurance companies that offer insurance policies that are affordable, but there are some that can be a bit shady.

Since it is your financial future on the line, it is important to choose the right company and policy.

Get great rates on car insurance policies just by entering your ZIP in the FREE quote box!

Purchasing car insurance is more than just quickly finding a cheap rate and signing the policy. In order to get the best policy, you need to take the time to determine why you want insurance, what you need it for, how much you can spend, and what the company is like.

After figuring all that out, you will be better informed to make a decision on whether to purchase cheap insurance or not.

Purpose of Insurance

Insurance has often been referred to as a necessary evil. Most folks don’t like to pay the premium every month, but if it is needed they sure are happy they did.

The business of car insurance was started to help protect drivers from paying a lot of their own money to fix damage to one’s vehicle or person.

Car insurance has become so important that almost every state requires that every person who drives must have a certain amount of insurance.

Most states just require liability insurance, which helps pay for damage to the vehicle of the not-at-fault party and for any of their injuries.

Most drivers choose to purchase more coverage than what the state requires. This is especially true for newer vehicles and to help pay for any bodily damage.

Additional coverage includes property coverage which covers damage to your vehicle from multiple causes, and medical coverage. The specific types of coverage can be found through the Insurance Information Institute.

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How to Keep Your Insurance Rate Low

For those on a budget, finding auto insurance coverage at the lowest prices possible is important. One way to keep your premiums at the bare minimum is to purchase just the basic minimum that is required where you drive.

Keep in mind that if you purchase this you will be personally responsible for any amount over what the insurance policy covers and for all damage to your own vehicle.

When you choose an insurance policy you have the option of choosing your deductible amount, which is the amount that you are responsible for prior to the insurance benefits. A higher deductible will result in a lower premium.

You also get to choose your limit amount. This refers to the maximum amount that the insurance company will pay for each claim. The lower the amount, the lower your premium will be.

Some of the best ways to keep your insurance rates lower, without sacrificing coverage, is to be a safe driver, drive a vehicle that is a few years old, and that has safety features and devices to ward off theft, live in a safe neighborhood, drive fewer miles, and have a good credit history.

Finding a Good Insurance Company

You should not buy an auto insurance policy based off price alone. Finding an affordable auto insurance policy may be important, but signing with an honest and stable company is just as important.

Ultimately, you want a company that has enough assets to cover not only current claims but future ones as well.

You also want to go with a company that is fair when it comes to paying out claims. Some will do anything to prevent you from getting money, such as denying claims for no justifiable reason or settling for much less than you deserve.

You can inquire about any complaints or questionable tactics about a particular insurance company by contacting the insurance department for your state.

You can quickly obtain this information through the National Association of Insurance Commissioners website.

To find out how the company is doing financially you can visit any one of the companies that rate insurance companies. Examples include A.M. Best or Standard and Poors.

To contact the insurance company of your choice, you can do so in a variety of ways.

You can contact them directly on the phone or at an office in your neighborhood, you can go to their website and sign up for a policy that way, you can use an insurance broker, or you can do a general search online.

You can begin your search for auto insurance right here for FREE by filling in your ZIP code!

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