Cheap car insurance is certainly one of the things no one would refuse if they had a chance to get it. But too often car owners are the ones who are reducing their own chances for laying their hands on affordable car insurance. It can be the car they are trying to insure or the inadequate amount of coverage they feel is appropriate to their needs. Or it could even be a matter of the insurance policy type they’ve chosen in the first place. Different policies will offer different chances for getting cheap car insurance, that’s why it is important to understand the basics behind each type and select the most appropriate for your individual situation. So which are the insurance policy types available on the market and which one you should choose?
Third party liability
Third party liability policies are the bare bones of car insurance in general. As you may already know, third party liability coverage is the sole coverage type required by law, so it’s logic that there are policies that carry only the bare essence of car insurance. With such a policy your insurance company only settles bodily injury and property damage claims that were caused by your actions while operating the insured vehicle. No other situations are covered to any extent. As you have probably guessed it, this is the policy type that will guarantee you cheap car insurance all the time. But since it carries so little coverage it may only be suitable for those who drive used cars that wield insignificant market value.
Third party, fire and theft
Third party, fire and theft policies are an advance version of the simple third party liability that has some meat grown over the bones. As you have already guessed from the name of it, this policy type delivers additional coverage besides the mandatory third party liability. It will pay for the fire damage or reimburse the current market value of the vehicle in case it gets stolen. These policies are a bit more expensive, but you can still get cheap car insurance with them by shopping around. And they are usually aimed at drivers who have used cars or have settled their auto loans and still have a higher value to their vehicles.
Fully comprehensive policies represent the most expensive, and ironically the most widespread policy type in the United States. There are many coverage options included with these policies and the limits are usually high, so you will be covered in virtually any situation. But the main reason for their popularity is not the abundance of coverage delivered. These policies are a contractual requirement imposed by lending institutions when taking out an auto loan. Knowing how many people buy cars by financing them it’s evident why most car owners get fully comprehensive policies whether they like it or not.
Specialized policies are usually aimed at special cars such as collectibles, classic and vintage cars, although the definition may differ from company to company. Such policies are usually designed and tailored to address very specific needs of special car owners and may include various exclusions, restrictions, special provisions and so on. It’s definitely not the best policy type for cheap car insurance but if you’re trying to insure a classic car it’s the right one.