If you are seeking ways to save money on your auto insurance plan downgrading from full coverage auto insurance to liability only auto insurance is a great way to cut costs. Liability auto insurance is the least expensive type of insurance coverage but it is the riskiest. If you are in an accident, you are responsible for covering the costs of all damage to your vehicle and any medical expenses as well if you are found at-fault for the car accident. Liability insurance gives protection to the other person or property that you damaged.
Liability only car insurance is the minimum amount of car insurance coverage that you are required to get. Some people add a few extra features to liability only insurance coverage like adding roadside assistance or collision coverage to help reduce the amount of money they have to pay if they are involved in a car accident. With some auto insurance providers liability only doesn’t cover things like theft or vandalism to your vehicle. Check with your states requirements in order to see what the minimum amount of coverage is that you are allowed to choose for your vehicle.
Anyone that wants cheap auto insurance will definitely find benefits from liability only auto insurance coverage but most insurance agents and even financial advisors recommend against this type of coverage. Always consider what could happen to you financially if you are involved in a car accident. Do you have extra cash reserves to pay for the cost of damage to your vehicle, property, and bodily injury? Can you afford the deductible amount that is required by the insurance company? Depending upon the vehicle make and model the cost of your insurance can also vary. It may only be an extra $100 or more a year to upgrade to full coverage auto insurance from the minimum auto insurance.
Risks Associated with Liability Only Insurance
A big risk you take with liability auto insurance is opening yourself up to lawsuits. If you are at fault and you cause bodily injury to another person. Your insurance company may not cover the amount of the medical expenses to the other person, leaving you liable for these expenses and leaving you vulnerable to lawsuits. Courts will usually rule in favor of the victim and will deduct money from your paychecks if you do not have the funds necessary to pay for the extent of damages to the other person. Not only will they deduct money, they will add interest money to it and you may find you are paying for a car accident for 30 or more years. If upgrading to full coverage auto insurance could protect you from this scenario, it is understandable why so many insurance brokers and financial advisors heavily recommend you rethink your auto insurance policy.
To find cheap auto insurance, research quotes online and talk to several different insurance companies. Find out what type of risk factors you are already flagged for and if opting for liability only car insurance is the right route for you to take. Insurance companies look at things like your age, sex, vehicle make and model, driving record, and other things to calculate what your premium will be and how much coverage you are eligible for. One thing to remember with an auto insurance policy is that it may be cheap but once you have your first claim, your costs can skyrocket out of control.