June 22nd, 2010
Do you drive an old car or a car that's not worth that much? If you do, you may want to consider buying liability only car insurance, which could save you a lot of money.
Every state (except for New Hampshire) requires that you carry car insurance. But you're only required to have auto insurance to cover losses that you might cause to someone else's property or to cover you if you injure someone else – that's what liability car insurance is designed to cover.
In short, liability only coverage includes bodily injury coverage and property damage coverage. Typically, liability only car insurance is a good deal cheaper than a car insurance policy that covers both liability and the cost of replacing or fixing your car in the event that you cause an accident – if you're involved in an accident that causes damage to your car but isn't your fault the cost to fix your car would be paid for by the other person's liability insurance.
If you're looking for the most bare bones and cheapest policy, liability only car insurance might be a good fit since in almost every instance, liability only is going to be cheaper than a full-featured car insurance policy. If you have an older car you may consider liability only. For instance, if you're in an accident and your insurance company decides that the cost to repair the car is more that what the car is worth, they may choose not to repair it. In this case you would be saving money not paying for collision or comprehensive coverage.
Of course, you get a whole lot less coverage since you're on the hook for any costs associated with fixing or replacing your car if you damage it in an accident that you cause. Collision coverage would cover damages to your vehicle if you were to cause an accident. Comprehensive coverage would cover damages resulting in the cases of theft, vandalism, and natural disasters. Neither are required, unlike liability, but both are good to consider at the very least.
Liability only car insurance is definitely something that you should consider if you're looking for the cheapest car insurance possible but be sure to discuss it further with a licensed car insurance agent to ensure that you fully understand what liability only car insurance covers and what it doesn't. That's not something that you want to learn for the first time after you've had an accident.