Should you buy a cheap car insurance in California?

We are all looking to have the best deal on the products and services we purchase for obvious reasons. The insurance companies are aware of this. They know that what catches the typical consumer's attention is such terms as "sale" and  "discount." All you have to do is look at their advertisements and the insurance agents' attempts to beat any other quote that you have received.

But wait! Before you run out to find the cheapest insurance policy that will get you out on the road, think about why you should spend a little more money on a better policy. Here are 4 key reasons:

1. You Get What You Pay For. Welcome to the oldest truth there is. Like most things, cheap insurance is cheap because you're not buying much coverage and protection. In fact, in many cases, you're buying just enough insurance to get you out on the road without violating the mandatory liability insurance law but not enough to truly protect you.

In all states, insurance is required to drive a car on the road and those policies must meet minimum standards, called minimum policy limits. These limits vary from state to state, but in California, those limits are $15,000/$30,000/$5,000.

What do those limits mean? The amounts--in sequence--reference the maximum coverage for bodily injury damage per person, bodily injury damage per accident, and property damage coverage per accident. These amounts only pertain to your liability to another person for damages caused when you are at fault.

While $15,000 may have been adequate 10 or even 20 years ago to pay for the bodily injury in many cases, it is increasingly becoming an inadequate amount with rising health care costs and inflation. Also, many car accidents exceed $5,000 in property damage. Remember that if your liability insurance is not enough to pay for the injuries covered by your negligence, the injury victim will start looking toward your house, your paycheck, and your assets to pay for their injuries. So do not rely on minimum policy limits to protect you  and your assets, especially if you have significant assets, such as multiple vehicles, real property, etc.

2. Cheap Insurance Policies Often Do Not Provide Uninsured/Underinsured Motorist Coverage. The absolutely most important insurance coverage, other than liability coverage, is uninsured/underinsured motorist coverage (UM/UIM). This coverage provides you with protection when you are hit by one of the drivers who are not insured and in many hit-and-run accidents, where you simply are unable to obtain the other party's insurance information as they flee from the scene. 
But cheap policies do not include UM/UIM coverage. It is not required by law. But it should be, and it is certainly in your best interest to have this kind of coverage.

It is not uncommon for uninsured motorists or "hit and run" drivers to inflict a serious property and bodily damage to the other driver. And as you may expect, people who don't have the respect and responsibility to have liability insurance and/or to stop at the scene of the incident instead of running away, also tend to be the most reckless drivers who put themselves and others in dangerous situations on the road. So, be sure to add UM/UIM coverage to your car insurance policy.

3. Cheap Insurance Policies Do Not Provide for Med-Pay. Another useful additional coverage not included in cheap insurance policies is med-pay benefits. These benefits are paid to anyone injured in an accident, regardless of fault. With many people living without health insurance, this benefit is extremely valuable. But it is not included in the cheap insurance policies. The best part about this coverage, that it provides important coverage for minimum extra-cost.

4. Cheap Insurance Policies Do Not Provide Rental Reimbursement.  Rental reimbursement coverages covers your expenses associated with renting a vehicle when your care is being repaired after an accident. Usually, this kind of coverage is limited to 30 days, but this is usually long enough to repair the damage to a car. This coverage is especially important if you live in a suburban area and no convenient access to public transportation. In this case, you will often be forced to rent a car, and paying a daily rental fee without the expectation of being reimbursed can amount to a significant expense, which can be easily avoiding by including this coverage in your insurance policy for a small fee.