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Value vs. Price in Auto Insurance

Like most of us, you probably have a budget to stick to each month. And, depending on your personal financial situation, that budget might be restrictive or relatively generous. If it’s restrictive, then when you compare auto insurance rates that can mean that you place more importance on affordability than value.

But when you compare auto insurance rates, it is a good idea to think about value too – not just whether or not you can afford to pay the monthly premium or you whether or not you have found the lowest price. Because if the premium you pay each month doesn’t give you a value that you respect, then it is really just throwing away money you probably can’t afford to lose.

The value your auto insurance policy offers you can be hard to quantify. The best way to look at it is to consider how much protection it offers your overall financial picture. For instance, an auto insurance policy with a $1,000 deductible for property damage liability and a $10,000 limit is not only going to expose you to $1,000 worth of financial responsibility for every incident, it is also going to require you to pay damages that exceed $10,000 – which can easily happen with many of the newer model vehicles. But a more expensive policy with a $500 deductible and $20,000 limit for property damage liability offers you more protection, and more value, with a higher premium.

Auto insurance can ensure that you don’t need to dip into your personal coffers in order to reimburse someone else, or yourself, for the damages done in a car accident. This is a value almost beyond measure when trying to consider future risk of accident and the costs that could be involved.

May 18, 2011

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