As the economy struggles to regain its footing, people have been trying to save on all of their bills from cable to cheap car insurance. While having the minimum coverage on your ride may see like a great idea, here are some instances where having liability only insurance could end up costing you more in the end.
For starters, having this type of policy will only cover you up to a fixed amount. This means that if you cause an accident, your insurance will pay up to a certain amount for damage done to the other car and the driver’s medical expenses.
Here’s where it becomes problematic for people that have only liability insurance.
If the damage done to the other vehicle exceeds your property damage liability or their medical expenses exceed your bodily injury liability, then you are responsible for paying the rest of the costs. When you factor in the skyrocketing medical costs we have today, this can add up quickly. Further, if you are unable to come up with the remainder of the balance the person you hit or their insurance company may sue you. If they receive a judgment in their favor, they can garnish your wages until you have paid all the costs. This will cause you significant financial hardship for a long time.
Another instance where having minimum coverage doesn’t pay is if you hit a high value vehicle. Say you hit a Mercedes or an Aston Martin and cause extensive damage to the car. If you have liability only insurance, it’s only going to cover you up to a certain amount. Therefore, if you have $10,000 in coverage, but the cost of the damage is $40,000, you’ll have to make up the difference. Again, if you cannot come up with this you’ll likely receive a lawsuit from the driver or their insurance company.
While having the minimum coverage may seem like a great idea, these instances show where paying a small premium every month will not protect you if get into a serious accident. Instead of trying to pay the lowest amount, think of what either of these cases could costs you in the end.
Now, this doesn’t mean you have to have full coverage on your vehicles. Instead, raise your existing coverage, that way it can protect you in cases like these. Best of all, doing this simple step won’t be expensive and can ensure you receive adequate protection should you ever cause a serious accident.