Sometimes Less is Less

Sometimes Less is Less
David LaCombe

Car ownership is a large part of the family budget for most households, and a major related expense is insurance. Ever since automobile insurance has been offered, buyers have been sensitive to how much it costs. Many insurance company ads focus on price, and new customers are acquired by companies who offer protection at a lower price. Many car owners have been attracted to purchasing minimum coverage. Several insurance companies are gaining customers by specializing in auto policies that contain just enough coverage to meet a given state’s financial responsibility laws.

On a positive note, offering minimum coverage is a far better alternative to operating a car without insurance, and many problems are caused by the accidents caused by uninsured drivers. On the negative side, coverage that meets state law minimums may be inadequate for the needs of many drivers.

Car owners who place an emphasis on price may be ignoring the possibility that minimum coverage policies may not protect their own cars that are damaged in collisions or are lost by theft. Further, minimum coverage policies are of little help in major accidents that a driver may cause. Consider the legal plight of a driver who has a policy that offers a maximum of $15,000 and that driver hits a passenger-filled car and causes injuries and damage totaling more than $50,000? If sued, that driver will still be responsible for all of the claims that exceed the limits of the minimum coverage policy.

Insurance protection works best when it provides proper protection. Minimum coverage policies may be more affordable, but they may end up costing their customers far too much when serious accidents occur. It’s important to contact an insurance professional to determine what coverage you need and then find out the best way to pay for it. For more information on vehicle coverage or other insurance topic, call me at (318) 445-9359.