Becoming an Adult

Why Carrying Only The Legal Minimum Really Isn't Enough

26 February 2018

Robin King

You need auto insurance in order to drive legally in most cases, but a full insurance policy can be pricey for many. One tactic people use to cut costs is to reduce their coverage to only the legal minimum, which means they are often carrying only a little liability and medical coverage when they drive. If you have found yourself in dire financial straits and are thinking of reducing your coverage, talk to your agent to work out a different strategy. Carrying only the minimum insurance is not going to be very helpful.

"Minimum" Is No Joke

The legal minimum for many states consists of some liability coverage and some medical coverage but rarely does the minimum require you to have coverage like comprehensive. Plus, the minimums are really low, and you could find they don't cover much in a serious accident. If you hit someone and their car sustains a lot of damage, they could sue you to recoup all costs not covered by your insurance. It won't matter to the court that your insurance has low limits; all the court will be interested in is whether you caused the accident and how that's affected the other party.

Accidents Don't Always Involve Other Parties

You can get into an accident by yourself, where there is no real damage to anything but your own car. If you have the legal minimum, you might be left without any financial help when you go to get your car fixed. So, you may have saved money on insurance, but now you have to spend that money to get the car fixed. And in fact, you may have to spend more than you would have spent on more comprehensive car insurance policy premiums.

Other Options Exist

If you are looking at a shaky financial situation, call your agent and explain what's going on. Look at dropping extra coverages that you never use (e.g., insurance coverage for renting a car while yours is being repaired), or maybe you can redo the payment schedule, so you pay lower monthly premiums instead of higher quarterly or twice-yearly premiums. Increasing your deductible can help as well. You may also find all you need is to take advantage of a payment grace period as you get back on your feet.

Your agent wants you to be protected in case of an accident, and he or she also understands how financial situations can change. You won't be the first, nor the last, to ask for help in making your policy more affordable to you. Contact a company like Rowell Insurance Agency for more information and assistance. 

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