6 Reasons to Buy More than Liability Auto Insurance

The top six reasons to buy more than liability auto insurance have a lot to do with your personal finances. Although you do not have to purchase anything other than basic coverage, you might want to reconsider that option after reviewing the consequences.

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Purchasing an automobile is a major responsibility that requires serious thought. You should know what to expect in terms of maintenance costs and upkeep. However, many people sometimes fail to realize that the proper choice for car insurance is just as important. Instead of spending time reviewing their options, they go with the cheapest rate they can find. Many times, this decision backfires.

Your State Mandates Additional Coverage

Your state mandates the amount of coverage you must purchase to remain compliant. Sometimes, you do not have the choice of simply buying a liability-only policy.

You need to understand the way your state operates because you cannot always rely on your car insurance company to give you these facts. You must verify everything yourself.

For example, the state of California only requires liability for bodily and property damage. In addition, the state has low minimum limits, especially for property damage, which is only $5,000.

Conversely, the state of New York requires three levels of coverage in its basic policy. It includes liability bodily and property damage, plus uninsured motorist and personal injury protection coverage. It also has higher minimum limits, paying twice as much for property damage, or $10,000.

It is difficult to tell why some states allow lower limits than others do — especially when comparing two large states like New York and California.

Each has a considerably high population, multi-lane highways and similar crime rates.

On the other hand, if you review the driving statistics provided by the National Highway Traffic Safety Administration, you will see a major difference in the number of fatal accidents. More than 3,000 deaths occurred in California during 2009 and slightly more than 1,000 occurred in New York.

Regardless of their reasoning for required coverage, the facts remain. If you do not want to break the law in your state, you must purchase the amount they require, not what you think you need.

Hit and Run Accidents

Depending upon the specifics of your liability-only car insurance policy, you may not qualify for compensation if the driver of an accident speeds away. If the guilty driver fails to provide identification and your passengers have bodily damage, you might be responsible for paying all of the medical bills, up front. You may be able to seek monetary restitution later, but it could take some time.

Your car insurance company may even deny your claim because they want to resolve the issue quickly. In some cases, it is better for them, to avoid losing money.

The amount of money that each car insurance provider pays toward health care for car accident victims is already very high. Adding the criminal aspect like a hit-and-run only increases their financial responsibility. This is because many people affected want to exercise their legal right to sue the guilty party.

The harsh reality of a hit-and-run car accident affects more people than you may realize, according to Bisnar/Chase Personal Injury Attorneys, a law firm that represents victims of hit and run collisions. The firm reported an increase of 19% in such incidents between 1999 and 2001. And they see more cases every year.

Just because someone leaves the scene of a car crash, does not mean he or she can escape punishment. Law enforcement officials have their ways of discovering the owner of the vehicle and, even if they did not commit the crime, they may be responsible. However, the length of time between finding the person and pursuing legal compensation could vary.

Sometimes, having the minimum coverage suits your needs. However, if you only have liability coverage and not comprehensive, personal injury protection, or uninsured motorist protection, you may forfeit the opportunity to sue in court.

Repairs to your Personal Vehicle

The positive aspect of liability auto insurance is you have a certain amount of security. You can use your coverage to make sure anyone involved receives adequate medical attention. You also have protection against damage to the victim’s property.

Unfortunately, this will not help you and repairs to your personal vehicle. The only time liability works in your favor is if your state has at-fault laws and finds you innocent. In this instance, the guilty party’s car insurance pays for your repairs. On the other hand, if you crash into someone, you have to dig into your own pockets. In a no-fault state, you have zero options.

You could waste thousands of dollars, depending upon the level of destruction. You may even total the vehicle, which would leave you with nothing.

Unlike collision coverage, which allows you to place a damage claim for your car, liability is only helpful to others.

Now, atop of everything else you suffered, you must find a way to pay the auto body shop. If the repairs are too costly, you might need to start looking for another car. This hurts your budget.

Few people can afford these kinds of issues and live on very strict financial plans. If you need to purchase a new car, this means you have to come up with extra money, at least for the down payment. Of course, if a new car purchase is necessary, you could opt for a vehicle that is cheaper to cover.

Someone Steals Your Car

Have you considered that someone could steal your car? In certain cities, this type of theft occurs every day. You can have as many fancy gadgets and anti-theft deterrents as possible and still become a statistic. Nothing guarantees the safety of your vehicle.

The police will certainly make an effort to locate your car and keep you aware of their progress. Unfortunately, this will not help you if they fail. This means you could lose your only means of transportation. On the brighter side, you may receive a telephone call from the police advising that they finally found your car. However, it might have extensive scratches, dents or other damage.

Perhaps the thief removed internal systems like your stereo or your steering wheel. This is something else many people never think about, but certain car parts are easy to remove and thieves often re-sell them on the black market. Often, a car thief makes more money stripping the car, rather than selling it in one piece.

With a liability-only auto insurance policy, you have zero assistance if your car is stolen.

In fact, it may not be a good idea to report the loss at all. They will not accept the claim and just giving them the information could work against you.

Many car insurance companies use these kinds of calls from customers to gather data. They include it in their risk assessment calculations and file it away for future use. Your call is now part of a negative statistic. This is true even when they do not make any payments, like in the case of a liability-only customer. If you have comprehensive coverage in addition to liability, at least you can file a claim.

Only comprehensive coverage pays the owner of a vehicle who reports a loss due to theft. With liability, even if you do regain your property, it will take weeks to restore it and, again, the cost comes out of your wallet. You can search online for comprehensive coverage options today.

Your State Has Extreme Weather Events

If you live in a state that has extreme weather events, you should purchase more than liability coverage because of possible damage. Specific parts of the nation have higher instances of floods, fires and hail. You could even live somewhere with very bad winter weather like ice storms.

While ice may not cause damage, a fallen tree with frozen limbs can devastate your vehicle. Liability will not protect against non-collision damage, either. You need comprehensive for this, too.

Maybe you feel secure because you park your car in your home garage. Your garage acts as protection from these types of events. If this pertains to you, the odds are definitely in your favor.

However, you cannot keep your car parked in your garage forever, and weather is unpredictable. You still have to drive to work. You need groceries. There are specific obligations you need to meet daily. You purchased your car so you could take it on the road and it is not worth taking the risk. For that reason, you might want to search for coverage that will not let you down.

Your Auto Insurance Provider Can Cancel Your Policy

If you have more than two accidents within three years and only have liability, your auto insurance provider can cancel your policy. This is a serious reason for thinking about adding extra protection.

The main reason your car insurance company accepted you is because they receive monthly or annual premium payments from you. This is how they pay for damage claims. However, if you only keep the bare minimum coverage, yet consistently receive payments, they might decide you cost them too much.

Remember, liability will make payments toward your medical bills and to the victims. This could amount to a lot of money, especially if you really hurt someone. If the insurance company provides you with the maximum amount of your policy, it may be as high as $25,000 for each victim. They might only receive $700 to $1,000 each year from you.

Over a year or two, they will likely begin to calculate the amount you cost them and decide it is better not to renew your policy. It is within their rights to do this, so you should keep this in mind.

Your car insurance options are very personal and you have every right to stick with something basic. After all, as long as you abide by your state’s laws, you have no further obligations. However, if you find yourself in a sticky situation, you might rest a little easier knowing the extra protection will help put your life back together.

The FREE ZIP code toolbox is an excellent start to finding great car insurance rates today!