Why Should You Avoid Minimum Coverage for Your Vehicle?
The Long Run
If you drive a car, you must maintain auto insurance. Even rental vehicles require auto insurance coverage. Auto insurance protects your investment as well as other people on the road. Auto insurance can pay for damage to your car, the people within your vehicle, and injuries or to the other parties in the accident. Without auto insurance, you risk breaking the law and losing your savings.
Yet, car insurance can be expensive. Full coverage can cost thousands of dollars a year for a new vehicle. For those struggling to cut finances, minimum coverage seems like a wonderful option. In the long run, minimum coverage can leave you with more expenses than the savings are worth. Read on to learn why minimum coverage is not a good deal and how you can save money without cutting insurance.
Who Pays for Your Vehicle Repairs in an Accident?
One of the deciding cost factors of full coverage auto insurance is the cost of repairing or replacing your vehicle. It makes sense the reason minimum coverage is comparatively so inexpensive since it does not cover any damage to your vehicle.
Many times, your car can suffer severe damage in an accident where no other vehicle is involved, or the other vehicle does not have any insurance. If you only have minimum insurance coverage, your car is not financially protected. Therefore, any repairs will need to come out of your pocket. The few dollars you save on insurance premiums can cost you dearly in vehicle repairs or replacement.
How Much Money Is Provided for Medical Expenses from an Accident?
Medical bills are expensive for minor injuries and procedures. Imagine the bills resulting from a severe car accident. Minimum coverage only provides minimum medical coverage to victims in a car accident.
The remainder of the medical bills does not get washed away because you have minimum car insurance. Instead, the victim and his or her family can file a lawsuit against you, personally. They go after your savings, your home, or your assets to pay the remainder of the medical bills. In the long run, your out-of-pocket expenses to care for the car accident victim can put you into bankruptcy.
What Can You Do to Protect Your Assets and Save Money on Car Insurance?
Full coverage car insurance does not need to be unaffordable. While it is more costly than minimum coverage, it can be affordable for most people. Comprehensive coverage offers options to help cut expenses by putting some of the liability on your shoulders.
Like any type of insurance, car insurance includes a deductible. The deductible is money that you pay to cover expenses before the insurance kicks in. By choosing a higher deductible, you cut the insurance company’s risk and reduce your insurance premiums.
Look at your budget and determine the right deductible for you. You can drastically cut your premium by upping your deductible from $500 to $1,000 or $5,000. No matter how high the deductible, it will always be less than the full cost of repairing or replacing your vehicle.
To learn more about full coverage insurance options, contact the experts YourMoneyMagic. Our licensed professionals will be happy to answer any questions you have.