When you own a vehicle, there are a number of different types of car insurance that you can get. For instance, one can purchase liability, collision, comprehensive, personal injury protection, no-fault, uninsured motorist, or even gap insurance, just to name a few. With all the options, why do some people simply go with the minimum coverage required by law?
Some people think that the cost of car insurance is simply too high so they get only what is absolutely necessary in order to save money. The problem with this is that sometimes the minimum amount of insurance is not enough and you are actually stuck with whatever portion of the expenses the insurance doesn’t pay for when an accident occurs. If the minimum limits are too low, for instance, and you cause an accident to a very expensive vehicle, you could have a pretty steep bill to pay.
Age of Vehicle
Most states require liability insurance so that others are protected if you cause an accident. People with older cars often only get this type of insurance. The risk is that without collision insurance, if your car is also damaged in an accident caused by you there is no insurance to pay for the repairs. People with older cars that aren’t worth much often see this as an acceptable risk and a way to lower their insurance premiums.
It is important to weigh all the factors when determining the different types of insurance that can be included in a car insurance policy.