When it comes to your car insurance, you can’t be on the road without it. In every state, you need insurance in the case that you cause an accident, or an accident happens to you. In most states, the most basic level of coverage is liability coverage. While liability insurance coverage is cheap, it certainly isn’t the best option for everyone.
Liability insurance covers Bodily Injury Liability (BI) and Property Damage Liability (PD). This insurance helps pay for the damages in a wreck that you cause. Medical expenses, property damage, and loss of wages are included in the coverage. Depending on which state you live in, however, could vary on their state minimum of the coverage.
For example, in California, the minimum Bodily Injury Liability coverage required is $15,000 per person/$30,000 per accident minimum and $5,000 to damage on property.
If the damage equates to more than the insurance covers, you will be financially responsibly to make up the difference. If you are unable to do that, you could get sued for the difference.
Liability insurance coverage does not protect your medical bills or vehicle costs in the case of an accident.
Liability coverage is the minimum coverage you will need, but depending on the state, it will depend on what the minimums are. However, states such as New Hampshire, Virginia and Arizona offer an alternative approach to car insurance. These states don’t require you to purchase car insurance, but that option is only wise if you are financially responsible. In the event of an accident, you will need to be able to pay for any bodily injury of the person you hit, and cover the property damage. For most people, purchasing insurance makes a lot more sense.
Before you drive off in your new car, you have to have coverage on your vehicle. The minimum is liability, but some leasing companies may require more than the state minimum. It may be required to carry collision or comprehensive insurance, too.
Comprehensive coverage pays to repair or replace a covered vehicle that’s stolen or damaged by something other than collision. For example, damage caused by fire, wind, hail, flood, theft, vandalism and hitting an animal is covered.
Collision coverage is a coverage that helps pay to repair or replace a car if it’s damaged in an accident with another vehicle or object.
Since the leading company technically owns the investment (the car), they want the most protection for their assets. Once your leasing ends, in most cases you can drop the comprehensive or collision insurance and switch to liability.
Sure, it will cover some costs in the case of an at-fault accident. However, if the damage is bad enough, you’ll have to pay the remaining costs out of pocket. Liability coverage is convenient if you are looking for a cheap option. However, it’s not recommended with newer cars, as the risk is higher.
If you are not financially stable enough to be able to pay the medical and property damage for yourself in the case of an accident, you may want to consider comprehensive or collision coverage.
Below you can compare quotes and find the best coverage for you and your situation.