You have a lot of options when it comes to buying auto insurance. Many vehicle owners recognize the value of purchasing comprehensive car insurance. It covers most of your risks and keeps your financials in order should a problem occur. Yet, there are some instances when purchasing just Liability Insurance may be prudent. Take a closer look at a few examples.
What Liability Only Coverage Doesn't Do
It's important to know what Liability Auto Insurance does. It provides protection only for other drivers. If you cause an accident, this type of car insurance pays for the damage to the other vehicle or the other driver. It does not cover your vehicle, your personal injuries nor your personal losses. It can cover the medical losses and property losses of the other driver up to the limits you select on the policy.
Should an accident occur, and you cause it, you have no financial help for making repairs to your car. You would pay out of pocket for your vehicle's repair needs. Most often, this is not ideal.
If you have a loan on the vehicle, you may be legally required to carry liability, comprehensive, and collision insurance. These two additional policies might help you pay for your car's damage.
When Is Liability-Only Coverage Suitable?
Only you can decide when it makes financial sense to carry just liability insurance. It is a risk you have to be willing to take. Here are a few examples.
You Owe Nothing On The Car
You don't have a loan. You do not have a lot of money into the vehicle. You are okay with losing it if it is a total loss. In situations where the vehicle means nothing to you — or you could financially afford to fix it should an accident occur — liability insurance is often good enough.
The Car Has A Very Low Value
If the car is valuable, maintaining Liability Only Insurance isn't financially wise. However, if the car is worth only a few hundred dollars, carrying Liability Only Coverage may be suitable. Remember, you likely still can't have a loan on it, and you still need to be able to handle the repairs you need to make out-of-pocket. Still, for many, this is an acceptable level of risk.
If you are unsure what is right for you, speak to your Affordable Insurance Group agent. Talk about the value of the car and how easy it would be for you to replace or repair it in a serious accident before making this decision.