Every motorist has a different perspective, budget, beliefs and limitations. This would naturally reflect on choosing a policy. Some drivers cannot get enough coverage and are always looking to add more. They also have the money to spend and don’t see why not. Others may be struggling financially or don’t trust the system and just want to get cheap car insurance state minimum coverage. It is totally a personal choice.
In any case, it is best to know your options first before you decide. Also, you should carefully consider your financial position and requirements. The vehicle you own plays an important role in choosing coverage too.
What Is State Minimum Vehicle Insurance?
Every state determines the basic requirements imposed on motorists. This is essentially the liability section of a typical policy that pays for any injury or damage caused to third parties by the insured vehicle. This could be anything from injuries to property damages like hitting someone’s fence. Once it is determined that you are at fault you become liable for these losses.
Generally, limits set are very low so that everyone can afford at least this minimum amount. They are usually set like $10,000/$30,000/$10,000 which means the carrier will pay $10,000 maximum for one injured person or property damage and $30,000 for all damages and injuries. So, the limit on that policy is only $30,000 which is not much in today’s prices.
In no-fault states, motorists essentially buy their own injury and property damage cover. So, when someone else causes the accident, they still claim it from their own provider. It is called Personal Injury Protection. In any case, you cannot buy a policy less than this.
What Happens When the Minimum Limits Are Exhausted?
This is the main problem because the auto insurance company is done once they pay the maximum amount listed on a policy. Then, the third parties can pursue the owner of the car in the courts. Usually, they look at the assets of such a person to see if it is worth taking this route since it is an expensive process. Nevertheless, the person injured could be a lawyer and can take it all the way.
Even if you don’t have anything to go after, you still have your conscience. It is not an easy thing to walk away knowing you caused damages to others and have no means of paying for it. So, they just have to face the consequences of your actions on their own.
Who Needs the Basic Liability Car Insurance
If you are barely surviving financially, you have no option but search for the cheapest price and lowest coverage. There are many people who need a private automobile to go about their lives and work and expensive premiums make it harder for them to think about good coverage.
One important point to note here is that the basic liability doesn’t cover your own vehicle at all. So, if you have a fairly cheap car, you may be alright with not insuring it. But you may be taking a large financial risk if it is valuable. As long as you know what you are getting into you may be able to prepare for it better. At least you would be extra careful on the roads knowing you have no coverage for your own ride.
This may actually be a plan. Imagine a teenager just starting to drive. The premiums would be through the roof for someone like that. The idea may be to buy a cheap auto for the time being and insure it for the minimum you can get. After a couple of years of experience, the premium would go down and hopefully the youngster can afford a better car.