When Does Liability Only Car Insurance Make Sense?

Today, most companies offer quotations for comprehensive policies, unless you specify otherwise. They work hard on preparing attractive full coverage packages with many additions. But, there are still times it may be all right just to buy the minimum legally required to drive. So, when should you forget about the rest of the readily available plans and look for cheap liability auto insurance online? This post will examine the circumstances in which people can be comfortable with this amount of protection and bring down the costs to affordable levels or save money.

Is Liability Only Vehicle Insurance Enough? 

There are circumstances in which choices may be made for you already. So, you may not have the luxury to choose whatever you need or want and here are some of those situations. Also, there is nothing wrong with making smart decisions and taking calculated risks, as long as you are aware of the consequences and prepared for them.

Financial Hardship: Certainly liabilities coverage only has its place as well. Millions of motorists don’t have the luxury of choosing whatever they like due to financial restrains. They cannot even afford the state required basic levels. Those people would be looking all over for the cheapest automobile insurance available on the planet and nobody can blame them. If they could afford a mandatory policy they would be happy with just that. They have families to look after and other more urgent bills to pay.

Teenage Drivers with No Money and High Rates: Also, most youngsters would start with basic policies if they have a starter car that is not worth much. Some teenagers buy cheap cars just to be able to purchase liability only coverage for it and be done. When you consider how high rates can get for a youngster in his/her first year of driving you can understand the reasons behind just wanting enough to be barely legal.

High Risk Drivers: After a bad at fault accident or a DUI premiums can increase substantially. That may be the time to drop Collision and Comprehensive covers for a time so that you can get affordable car insurance for high risk drivers.  For example, your car may be totalled already. Using the claim settlement to purchase a cheap used automobile may be a smart strategy since you know high rates are coming your way. This would allow you to switch to cheaper options for the time beingIf that is the case, you should go back to arranging a more inclusive policy as soon as the situation and/or car gets better.

Do I Need Full Coverage on my Car?

This brings us to the next reason why liability only automobile insurance may be good enough. When you have a vehicle that is not worth much money there is not much point in keeping Collision and Comprehensive. This probably goes with the first point of meagre financial means. If they had the money they would have probably bought a better car. It makes sense to save money on premiums and use it towards buying the next automobile.

Do I Need Full Coverage Insurance on a Used Car?

This question is related to the previous one and only you can answer it the best. However, you may need to start thinking when to drop collision coverage and comprehensive on a vehicle that is clearly coming to the end of its economic life. It may be time to think about the next auto and start saving money to finance it. When you have a car that is worth just $2,000 dropping full coverage for liability only isn’t a hard decision to make.

However, you can probably make similar decisions for cars worth much more if you have the financial means to shoulder a total loss. Rates can be too high to pay when you have recent claims and bad driving history. Besides, you probably wouldn’t want to put in another claim. So, paying out of pocket may be a better option that justifies taking some calculated risks. If you have no incident in the near future you can keep all the savings. You can read more on how to find cheap insurance for older cars in detail on another post.

When to Switch to Liability Only Auto Insurance?

When you buy a new automobile you would want all the bells and whistles on a policy. Over time that vehicle lose its value even though you may still like it. Older cars don’t fetch much when you come to sell it. That is when you should start looking from a value point of view and give up some of the idle protections. This strategy is more likely to pay off handsomely in big cities, high crime and auto theft areas and with a high-risk driver.

An extensive coverage is always nice and more comforting if you can afford it. You never know when you might need it and therefore, it is advisable to keep or get it. Thanks to many inclusive packages you can find them at reasonable prices. Generally, they are not as expensive as many people may think. And the difference between a full coverage and liability only can be small especially if you have good driving records. Vehicle insurers are able to calculate tight premiums these days and they would take into account that an auto isn’t worth much. So, get quotes for both in any case and compare them for price.

However, you should always try to get decent levels of protections against third party claims. This is the one area you cannot be too careful about since there are no upper limits to injuries and damages you may cause to other people. Again, the premium difference between a policy with much larger injury and damage limits and minimum one can be very little.

Do I Need Full Coverage on a Financed Car?

When you borrow money to buy an automobile you may lose that privilege of including or excluding anything. The lenders have interest on the vehicle that they can dictate what types of provisions they want to protect the loan. They can insist not only on Collision and Comprehensive but also Guaranteed Asset Protection. You should always talk to them before dropping any of them on a car with an outstanding loan. Lien holders can find it out, especially if their interest is registered on the policy. Carriers would have to inform them and lien holders may choose to insure the car themselves and make you pay the premium according to the loan agreement.

What Is the Minimum Liability Only Auto Insurance I Need?

As discussed above, cutting down on this shouldn’t be used as money saving measures. Today, people love litigations and there are many lawyers who are happy to chase after even lost causes. A fender bender can cause you a lot of headache. You may think that the damages are limited to the bumper or few scratches here and there. But don’t be surprised if you receive claims for whiplash and back pains and large hospital or consultation bills, loss of wages and emotional stress claims. It wouldn’t take long for basic state required car insurance to run out and you are left on your own to defend against these claims. There is no way of knowing how large they can get and therefore you should keep safeguarding against them even if you could do with the money saved, although it wouldn’t probably be much.

Share on Pinterest
There are no images.