Today families are finding it increasingly hard to make ends meet. They face a tough economy and a cost of living that seems to be always on the rise. Sadly, one consequence of this is that when choosing their auto insurance price becomes the main factor. You might be thinking, what is wrong with that? After all why pay more for the same product?

To understand why this may not be the best approach you should first consider the purpose of auto insurance. Generally speaking it protects you from a loss, perhaps from damage to your car or from liability on your part. Be aware that not all insurance policies are the same. So with that in mind, does it make sense to buy an auto insurance policy simply because it’s affordable? Even if it doesn’t properly protect you?

Consider these examples. What if you have a nice car that you can’t afford to replace or fix if something happens to it, but your auto policy doesn’t include comprehensive or collision coverage? Or suppose your family has a modest savings but your policy has very low liability limits? Clearly cheaper isn’t always better! What can you do? First, it’s important to get solid advice on what type and how much insurance you need from a knowledgeable professional. Next, after you know what you need, shop around. Many insurance companies offer comparable products and the price can vary widely from one to another. If you find that you still can’t afford the coverage you need perhaps your financial adviser can help you find some possible solutions. No matter the situation, buying the insurance policy that best fits your needs is always a good decision. Remember… cheaper is not always better!

Photo Credit: Andrew Steinmetz | License