Reader’s Question:

I’ve been browsing around for insurance to slap on my new car. I’ve stumbled across a couple of cheap auto insurance premiums, and they’re looking pretty attractive to me. However, I can’t shake the feeling that there’s a catch. How come other auto insurance premiums are much more expensive compared to other offers? What makes them different?

R. D. Lee

New York, NY

Good question. Some people are often too distracted by the low premiums of cheap auto car insurance to actually check what they’re paying for, while others get the most expensive insurance policies without even considering the fact that they may not even need some of the stuff they’re signing up for.

Here’s one good rule of thumb to check if you’re getting the right insurance policy:

Know what you need, look for it, and get it.

If you want to be insured for everything under the sun that could happen to you and your car, you definitely won’t find it in a cheap auto car insurance policy. If you only need insurance for car accidents, get a plan that only has collision coverage. Skip out on the comprehensive coverage, since it covers non-accident related problems like theft, fire and vandalism.

You may also want to check the other insurance policies you’re signed up for. They may have features that overlap with the car insurance policy you’re planning to get. For example, if your medical insurance covers your own expenses in case of an auto accident, skip out on insuring yourself from an accident.

As long as you know what you need, you won’t have to worry about spending on unnecessary coverage plans or making the mistake of not protecting yourself when it counts.