Full coverage typically means that someone has liability PLUS collision and comprehensive coverage. That means that they are covered if they cause damage to someone else (liability), if their vehicle is damaged in an accident they cause (collision) and for things like hail damage (comprehensive).
“Liability only” is the bare bones option that ONLY covers damage that you cause to another person. It means that there is NO coverage for your vehicle included. Why would someone want that? It depends on your financial situation and your car's value.
Mandatory Coverage
Liability coverage is what is required by the state in order to operate a vehicle. You don't have a choice on that.
Without it, you can get a ticket or even lose your license. This protects others from getting in a collision with someone and not being able to collect for damages.However, collision and comprehensive are only required if you have a lienholder that requires them. Most lienholders do require it, but if your vehicle is paid off then it is up to you to cover the vehicle or not.
Here are things to consider before choosing to carry liability only:
How much money do you have in savings? If your car was totaled tomorrow, would you have enough to purchase a vehicle to replace it? If you only have enough for a down payment, could you financially handle car payments?
How much is your car worth? If the car is worth $10,000, then you would be more likely to want to insure that value. If it’s worth only $1,000 or less, you might feel it’s a risk you’re willing to take.
The key here is to think about what would benefit you the most. Look at the insurance cost of liability only or full coverage. (We can run this comparison for you.) Personal finance expert Dave Ramsey says “It may save you a little money to drop collision insurance on your car, but it usually isn’t worth the risk.”
Call SAV-ON today at 888-867-2866 for a quote to look at what coverage is right for you!
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