Today, most companies offer full coverage when you are seeking vehicle insurance quotes, unless you specify otherwise. They work hard on preparing attractive fully comprehensive policies with many additions. But, there are still times it may be alright just to buy liability only car insurance policies. So, when should you forget about the rest of the covers offered and look for cheap liability auto insurance online?
Is Liability Only Auto 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.
Financial Hardship: Certainly liabilities only coverage has its place as well. Millions of motorists don’t have the luxury of choosing whatever coverage they like due to financial restrains. Again, millions of motorists cannot even afford the basic level of cover. Those people would be looking all over for the cheapest auto insurance available on the planet and nobody can blame them. If they could afford the mandatory liabilities policies 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 their cars are a starter one that is not worth much. Some teenage drivers 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 teenage driver in his/her first year of driving you can understand the reasons behind just wanting enough to be barely legal to drive.
High Risk Drivers: After a bad at fault accident or a DUI you can see huge premium increase. That may be the time to drop collision and comprehensive cover 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 insurance payout to buy a cheap used car may be a smart strategy since you know high rates are coming your way. This would allow you to switch to cheaper liability only car insurance for the time being. If that is the case, you should buy full coverage again as soon as your 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 insuring it. 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 policy costs 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 the only person who can answer that question best is you. However, you may need to start thinking when to drop collision coverage and comprehensive on a car that is clearly coming to the end of its economic life. It may be time to think about your next auto and start saving money on insurance to finance it. When you have a car that is only worth $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. When you have recent claims and bad driving history your rates may be too high to pay for full coverage. Besides, you probably wouldn’t want to put in another claim. So, paying out of pocket may be a better option that justifies buying liability only vehicle insurance. 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 your insurance 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 for a value point where you switch to liability only car insurance. This strategy is more likely to pay off handsomely in big cities, high crime and auto theft areas and with an high risk driver.
An extensive coverage is always nice and more comforting if you can afford it. You never know when you might need a particular coverage and therefore, it is advisable to keep or buy it. Thanks to many inclusive policy 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 liabilities only cover 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 your car isn’t worth much. So, get quotes for both liability only and full coverage in any case and compare them for price.
However, full coverage may not be affordable or necessary in some cases. In that case, you should still buy sufficient liabilities coverage if the money is not so tight. Again, the premium difference between a much larger liabilities package and minimum amount can be very limited.
Do I Need Full Coverage on a Financed Car?
When you borrow money to buy your automobile you may lose that privilege to insure it the way you want. The lenders have insurable interest on the vehicle that they can dictate what type of coverage you need to buy to protect their loan. They can insist not only on collision and comprehensive coverage but also gap car insurance. You should always talk to them before dropping collision and comprehensive on a car with an outstanding loan. Lien holders can find out the drop especially if their interest is registered on the policy. Insurers would have to inform them and lien holders may choose to insure the car themselves and make you pay the premium according to your loan agreement.
What Is the Minimum Liability Only Auto Insurance I Need?
Cutting down on liability cover shouldn’t be used as money saving measures. Today, people love litigation 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 only on 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 coverage to run out and you are left on your own to defend against these claims.