What Does Affordable Auto Insurance Mean

Affordable auto insurance is a term used a great deal in commercials and by those seeking car insurance. However, when people say that they want affordable auto insurance, there is a wide variation on what a person would consider to be affordable. The appropriate price for affordable auto insurance depends upon your situation, and can be affected by factors such as your age, demographics and the type of vehicle you drive.
What is Affordable Auto Insurance

The cheapest insurance policy you can find may seem as if it is the most affordable auto insurance. However, it is vital to remember that other factors go into selecting an insurance company in addition to costs. For example, if the most affordable policy requires you to have a $2,500 deductible, this means your insurance will not pay out until a claim has exceeded $2,500. Furthermore, that would mean that you would need to cover the first $2,500 of any car related damage. If you cannot afford to cover that $2,500, the policy is not really affordable to you at all.

Likewise, if your liability limits are too low, the insurance policy may leave you in a financially vulnerable position. For example, if the upper limits on liability are $10,000, you will be on the hook for any damage that you cause over and above the $10,000. If you cannot afford to make large payments in the event that you damage someone else's expensive car or in the event that you injure someone, choosing such a policy would be a terrible idea for you. The premiums may seem affordable, but you would be putting yourself into a situation where you were facing serious financial risk. A judgment against you in court could lead to bankruptcy, wage garnishment, or numerous other related legal actions.

The most affordable policy, therefore, is the policy that provides you with the coverage that you need in order to be fully protected. While this may mean the monthly premiums are a big more expensive than a bare bones policy, you will want to spend the extra in order to be fully protected.
Evaluating Auto Insurance Rates

Although you want comprehensive coverage, you don't want to pay more than you have to. Compare rates and quotes with national averages to determine if you are truly getting affordable auto insurance. For example, Car Insurance.com reports that the national average for premiums for 2010 is $1,566. For teens, however, the average is much higher. In 2009, the average per month for teens to insure ranged from just over $1700 to just over $1900 per year.

Looking at national averages can be useful in determining if you are paying too much, but remember that policy premiums change depending on where you live and other demographic factors, as well as based on your driving history. The definition of affordable auto insurance thus depends on what you believe is reasonable to pay for protection, and on the type of quotes you can find in your situation.