The Basic Car Insurance: Pros and Cons
Basic car insurance is the minimum coverage required by the law of the United States. The minimum amount basically depends on the state you are currently living in. In order to protect the driver from a lawsuit due to an accident, some amount of liability insurance is necessary to be taken off.
Purchasing basic auto insurance for your new car recommend will only help you to meet the legal requirement. This option is also more affordable than other policy options. However, your assets would not be fully covered for sure. On the other hand, driving a car without auto insurance is illegal and you will be in serious trouble especially if you are involved in an accident.
Types of car insurance
When it comes to car insurance, there are several common types of them. Property damage liability will cover any damage to other vehicles in an accident you are involved. Bodily injury liability will cover injuries by people involved in your accident. Personal injury protection will cover your injury and your injured passengers.
Collision coverage will only protect your vehicles, even if it is a new car recommend from a friend. Comprehensive coverage will protect your car from any loss or damage due to accident, theft, fire, storms, etc. Uninsured motorist protection will protect you if you got hit by a driver without insurance.
Pros of basic car insurance
Basic auto insurance premiums will only increase if you add more coverage and insurance types to your policy. It makes you protected from a lawsuit that requires a lot of money which you are at fault. If your car is not that worth on the market, basic insurance would be the smartest decision.
Cons of basic car insurance
Basic car insurance is definitely met the legal requirements. However, it will not cover any damage to your car especially if you need to replace it. It will require a lot of out-of-pocket money in the end.
Even if the accident is not caused by you, you are not getting protection if you got hit by an uninsured driver. Any repair and replacement costs should be paid by you. Other than that, the insurance could not help you if your car is stolen or damaged due to storms, fire, trees, and so on.
If you do not have a car yet and are currently paying to a bank for a car loan then you are eligible to pay for collision coverage. The amount is more than the basic coverage. And this is why you do not want to have basic car insurance.