All drivers in the State of Texas are required to carry auto liability insurance. Despite being required, it’s estimated 1 in 6 drivers in Texas are uninsured. There are serious consequences if found driving without insurance, but many people simply can’t afford auto insurance.

Many drivers are price conscious, turning to cheap auto insurance which often means state minimum coverage. There are even insurance carriers and agencies with “cheap”, “low cost, or “state minimum” in their name, preying on people seeking the lowest cost possible.

1. State Minimum Auto Insurance Doesn’t Cut It

State minimum car insurance limits in Texas are $30,000 up to $60,000 for each injured person in an accident and $25,000 for property damage per accident. State minimum auto insurance is liability only, meaning it does not pay for your vehicle repairs or your medical expenses. Yes it is cheap, but rarely is it enough. Being at fault for a two vehicle accident is quite likely going to outpace your minimum limits insurance coverage. $30,000 to $60,000 wouldn’t cut it if you cause serious injury to another driver or passenger. Not to mention your own vehicle’s value and your own health.

If you are at fault and your insurance doesn’t cover the total cost of the accident, and you can’t pay the balance, then you can be sued for the remainder. As a result of limited coverage, state minimum auto insurance is often cheap. But realize buying state minimum coverage does not adequately cover you, your passengers, your vehicle or adequately cover other victims involved in an accident.

Don’t roll the die on your auto insurance.

2. Cheap Auto Insurance Agencies Often Have Fees

Insurance agencies that sell minimum auto insurance, serve those whose policies often cancel. They write individuals that are difficult to insure and have little money to spend on policies. They advertise and are chosen based on one factor alone, their basic coverage liability is cheap. Family friendly service, quality policies, customer satisfaction, none of these factors are why people choose cheap auto insurance carriers or agencies. Shouldn’t there be more factors in an important decision than price alone?

To increase profits, these agencies often provide minimum coverage with low premiums but almost all of them have FEES. If you do receive a quote for state minimum coverage, you’ve got to ask about the FEES and then compare the premium with FEES to higher coverage with an independent insurance agency. You may be surprised with how much more coverage you could receive and possibly at a lower or similar cost.

3. Cheap Auto Insurance Carriers Quibble Over Claim Costs

If you total your car and have basic “full” coverage, you may find that your insurance company will quibble over the value of it. Sure, they said they would replace your car, but now they are saying that you had dings and dents in it, and that it is “comparable” to other models of its age. The problem is, you took good care of that car, and it had low mileage and now they want to use bondo on the body. Find out what you are buying, is it bondo that will be used or replacement parts?

A cheap insurance policy may even state that your replacement vehicle must be “similar” to the car that was totaled. If you are driving a customized car or truck with many add on parts and labor, many budget friendly insurance carriers will ignore those components and give you a replacement cost far less than what you put into the vehicle.

4. Cheap Auto Insurance Means a High Deductible

Cheap insurance carriers and agencies can often offer low rates on car insurance through a VERY high deductible. If you have a loan on your car or truck, you will typically need comprehensive insurance. The lender really owns the property, they loaned the vehicle for your use and typically require you to pay for comprehensive coverage.

So, you find the cheapest comprehensive auto insurance you can, and have a wreck. No problem, because you’re covered, right? Sure, you’re covered, but you have to come up with $2000 to $4000 to even start getting the car fixed, because your policy has a high deductible.

Check the deductible of your plan, unless you routinely keep a couple of grand around for emergencies

5. Cheap Auto Carries Push One Month Policies

This means your policy renews every month. They can change your rate every 30 days and inflationary trends will show up in next month’s premium. If you have a wreck…BANG, they can go up right away. Buying a six month or yearly policy allows you to lock in the rates for a period of time regardless of what the marketplace is doing.